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Congress \ 

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IIOuSE OF REPRESENTATIVES 



Document 
No. 734 



2136 



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VIRGIN ISLANDS 



REPORT OF (JJ) 




L^7~ 



JOINT COMMISSION 

APPOINTED UNDER AUTHORITY OF THE CONCURRENT 
RESOLUTION PASSED BY THE ^ 

r M « 

Congress of the United States (jUp 

JANUARY, 1920 



36 



COMMISSIONERS ON PART OF SENATE 

WILLIAM S. KENYON, of Iowa 
WALTER E. EDGE, of New Jersey 
EDWARD J. GAY, of Louisiana 

COMMISSIONERS ON PART OF HOUSE 

HORACE M. TOWNER, of Iowa 
FINIS J. GARRETT, of Tennessee 
PHILIP P. CAMPBELL, of Kansas 



April 19, 1920. — Referred to the Committee on Insular Affairs 
and ordered to be printed 



WASHINGTON 

GOVERNMENT PRINTING OFFICE 

1920 



■■ 



' 



sflAV S |U2Q 



CONDITIONS IN THE VIRGIN ISLANDS. 



In January, 1920, Congress passed the following concurrent 

resolution: 

Resolved by the Hovse of Representatives (the Senate concurring), That a joint com- 
mission to consist of three Members of the Senate and three Members of the House of 
Representatives, to be appointed by the Vice President of the United States and the 
Speaker of the House, respectively, is hereby created to visit the Virgin Islands and 
to report fully to Congress as to existing conditions in the said islands, and particularly 
to report and recommend action by Congress, if need there be therefor, with reference 
to whether the present government, under Executive direction, should be superseded 
by civil government, provided by Congress, as contemplated by act of March 3, 1917 
(39 Stats., p". 1132\ said government being now only temporary in character and, 
by order of the President, being now vested in officers of the Navy; also, as to whether 
Congress should at this time provide for a civil government of the islands by an organic 
act: also what, if any, legislation is necessary pending the formation and adoption of 
an organic act, and as to the general conditions existing in the islands. Said report to 
be filed at the earliest date practicable, and during the Sixty-sixth Congress. 

Under the provisions of this act the President of the Senate ap- 
pointed William S. Kenyon, of Iowa; Walter E. Edge, of New Jer- 
sey, and Edward J. Gay, of Louisiana, as Senate members of such 
commission; and the Speaker of the House of Representatives 
appointed Horace M. Towner, of Iowa; Finis J. Garrett, of Tennessee; 
and Philip P. Campbell, of Kansas, as House members of such com- 
mission. 

The Secretary of the Navy designated Rear Admiral James H. 
Oliver, United States Navy, and Maj. Jesse F. Dyer, United States 
Marine Corps, to accompany the commission on its visit to the islands. 

In accordance with the suggestion and arrangement made by the 
Secretary of the Navy the commission went by rail from Washington 
to Key West, where the U. S. S. Dolphin was placed at their disposal. 
It arrived at the harbor of St, Thomas at noon Thursday, February 5. 
The commission proceeded to the administration building, where they 
attended a session of the Colonial Council. 

Following this, at 3.35 p. m., the commission began its hearings, 
first receiving the statements and testimony of members of the 
Colonial Council. Other witnesses were also heard and these hear- 
ings continued, usually with three sessions each day, during the stay 
of the commission in the islands. 

February 7, the commission sailed from St. Thomas to the island 
of St. John, arriving at 2.30 p. m. The testimony of several witnesses 
was heard as to conditions on that island. The commission then 
sailed from St. John to St. Croix, arriving there in the night. 

On the following day the members of the commission visited 
various parts of the island, and in the afternoon received some dele- 
gations representing various interests of the island on board the 
Dolphin. 

3 



4 CONDITIONS IN THE VIRGIN ISLANDS. 

On Monday at 9 a. m. the commission met with the Colonial CounciJ ' 
of St. Croix in the Government House at Christiansted. Various 
statements and petitions were presented, and the hearings on that 
island were commenced lasting all that day and evening, and all day 
Tuesday, February 10, and until 11 o'clock that night. The com- 
mission then sailed for Charleston, S. C, where they disembarked, 
completing their return journey to Washington by rail, arriving 
February 17. 

Additional hearings were held by the commission in Washington 
February 20, February 23, February 25, and on March 2, at which 
additional testimony was taken affecting the interests of the islands. 

The commission was very fortunate to have the constant assistance 
and advice of Rear Admiral Oliver. Admiral Oliver was the first 
governor appointed by the President to administer the government 
of the islands. To his wise and tactful management is largely due the 
success which has so far attended the American occupation. Admiral 
Oliver served about two years and was succeeded by Rear Admiral 
J. W. Oman, United States Navy, the present governor, who con- 
tinues with rare discretion and judgment the policy of his predecessor. 
To those men and their efficient subordinates is due the success of the 
administration of the islands under the Navy. 

The commission is also under obligation to Maj. Dyer, who accom- 
panied the commission as aid to Admiral Oliver. His service with 
Gov. Oliver during the latter's incumbency made his information 
/and advice valuable to the commission. 

On its visit to the Virgin Islands the commission examined 67 
witnesses, and the report of the hearings covers 626 typewritten 
pages of testimony, which it is hoped may be published for the 
information of Congress. 

GEOGRAPHY AND PHYSICAL DESCRIPTION. 

The Virgin Islands are a part of the great archipelago between 
North and South America known as the West Indies. They consist 
of three principal groups: The Bahamas, lying East of Florida; the 
Greater Antilles, consisting of Cuba, Haiti, Porto Rico, and Jamaica; 
and the Lesser Antilles, a numerous line of smaller islands extending 
in a curve east of Porto Rico and southward to South America. The 
most northern and eastern group of the Lesser Antilles is known as 
the Virgin Islands. 

The Virgin Islands are divided into three groups. The islands of 
Culebra, Vieques, and adjacent smaller islands, belonged to Spain, 
and came into the possession of the United States when Porto Rico 
was ceded. These islands lie between Porto Rico and St. Thomas, 
The eastern group is a British possession and comprises the islands of 
Tortola, Anegada, Virgin Gorda, and adjacent smaller islands. The 
group known as the Danish West Indies comprises the islands of 
St. Thomas, St. John, St. Croix, and adjacent smaller islands. The 
total area of the three groups is less than 300 square miles. Besides 
the three principal islands named there are about 50 smaller islands 
belonging to the Danish group, most of them not named and unin- 
habited. The total area of this group is less than 150 square miles. 
St. Croix, the largest of the islands, has an approximate area of 85 
square miles, St. Thomas 30, and St. John 20. 



CONDITIONS IN THE VIRGIN ISLANDS. 5 

St. Thomas is situated oast of Porto Rico, 40 miles distant. Its 
port is 1,400 miles southeast of New York. It is 1,000 miles east of 
Key West . 1 ,000 miles from the Canal Zone, 4S0 miles from La Guaria, 
the chief port of Venezuela, South America. St. Thomas harbor is 
considered the best and safest harbor of the West Indies. Situated 
on the Virgin Passage, and commanding strategically the entrance 
to the Caribbean Sea, it practically dominates the Northern coast 
of South America, the entrance to the canal, and the entire eastern 
coast of Central America. The ships of all nations have visited this 
harbor from the time when Columbus discovered the islands in 1493 
down to this day. 

St. Thomas is about 13 miles long and about 3 miles wide. The 
entire surface is broken, rising to a ridge along its entire length, in 
some places 1,500 feet high. Its coast line is indented making a 
succession of bays and capes, very picturesque and beautiful. 

St. John is similar in configuration. It, too, has a fine harbor, 
Coral Bay, which engineers say might be developed at comparatively 
little expense to rival the famous harbor of St. Thomas. 

St. Croix is 40 miles south and is quite different in physical aspect 
from St. Thomas and St. John. It, too, has its mountains, but most 
of the island consists of fertile plains, with a rich and easily cultivated 
soil. 

The climate of all the islands is exceptionally fine. The maximum 
temperature is 91°, and the minimum 68°, with an average of 79°. 
The ever-present northeast trade winds temper the heat, making and 
keeping the climate delightful all the year. The average rainfall for 
St. Thomas is 38 inches, that of St. Croix is 47 inches. 

HISTORY. 

The archipelago now known as the Virgin Islands was discovered 
by Columbus on his second voyage in 1493. The group was so 
numerous the islands could not well be individually named so 
Columbus called them the " Virgins," suggested by St. Ursula and 
her 11,000 virgins." 

When discovered the islands were almost certainly inhabited by 
the Caribs, a fierce and warlike Indian tribe which originally inhabited 
many of the West Indies. The Caribbean Sea derives its name from 
these Indians. Inscriptions and figures on rocks on the island of 
St. John said to have been the work of the Caribs are still in an 
excellent state of preservation. 

The first attempt at a European settlement on the Virgin Islands 
was made by Erik Smidt, a Dane, who landed on St. Thomas in 
1666 and took possession of it for Denmark. A small colony was 
established, which, after great hardships, was shortly abandoned. 
In 1672 the Danish West India Company sent Jorgen Iversen with 
100 colonists to the island. This was the beginning of permanent 
occupancy and settlement. In 1674 slaves were brought from \( 
Africa, and by 16S0 there were some 50 estates established, engaged 
principally in the cultivation of tobacco. 

For 245 years the Virgin Islands remained a possession of Denmark. 
There were two short intervals when they were held by Great Britain, 
once from April 1801 to February 1802, and again in 1807 when they 
were seized during the Napoleonic wars. They were turned back 
to Denmark again in 1815. 



6 CONDITIONS IN THE VIRGIN ISLANDS. 

The history of these islands during these years varies from periods 
of the greatest prosperity to those of suffering and despair. The 
harbor of St. Thomas was for most of this period the principal port 
of the West Indies. It early became the principal entrep6t and dis- 
tributing center for the slave trade. It was made a free port and 
became the resort of trading vessels of all nations. During the decade 
following the year 1820 an average of nearly 3,000 ships called there 
annually. All the principal islands were cultivated even to the 
mountain tops. The plantations produced sugar, tobacco, cotton, 
and other products at great profit to their owners. In 1848 Denmark 
abolished slavery in the islands and from that time the agricultural 
interests of the islands decreased. The low prices of sugar and 
tobacco which prevailed for years made it unprofitable to work, the 
plantations with paid labor. 

As soon as steam as a motive power began to supersede the sailing 
vessels the commercial importance of the islands also began to 
decline. And now as oil is beginning to supersede coal as a fuel a 
further decline is experienced. 

No consideration of the history of the Virgin Islands would be 
complete without reference to the buccaneering years when the islands 
were the rendezvous and their indented bays and harbors the safe 
retreat and hiding places of the privateers and pirates who for so 
many years "roved the Spanish Main." The complete history of 
those years will for obvious reasons never be written. But the 
archives of the principal European nations engaged in maritime 
enterprise and American colonization, if searched, would throw light 
on an era which for romance and adventure has no parallel in the 
history of the world. 

Early in the sixteenth century French corsairs, Dutch sea rovers, 
and English smugglers, slavers, and privateers began to appear in 
the West Indies. In the seventeenth century these nations found it 
both necessary and profitable to wage a general warfare against 
Spain, who was trying to keep them all out of her American posses- 
sions. This loose association became known as the buccaneers, who 
for many years preyed on Spanish commerce and attacked the 
Spanish settlements both on the islands and mainland of North and 
South America. The buccanneers were for the most part a lot of 
dare-devils, reckless and often lawless, but when serious work was 
undertaken they became well regulated and orderly. If a French 
fleet came over to attack a Spanish possession they attached them- 
selves to the French and acted under their orders. If an English or 
Dutch fleet came for the same purpose a like course was followed. 
When any of these drove out a Spanish settlement and planted a 
colony of their own in its place, it became a haven of refuge for the 
buccaneers. In some places the buccaneers took exclusive posses- 
sion. Here they gathered supplies, planned their raids, divided their 
spoils, gambled away their "pieces of eight," and passed the nights 
in drunken revels. The world paid them tribute, and wine, women, 
music, and dancing were the rewards of hardships and daring. When 
supplies ran low and the pirates— for such in fact they were — -had 
lost their money, they clamored to go to sea again, or to be led 
against some Spanish settlement. The strange fact was that they 
were not only countenanced but courted by the European nations 
desirous of breaking the power of Spain and seeking to supplant her 



CONDITIONS IN THE VIEGIN ISLANDS. 7 

colonies with colonies of their own. It was by their help that the 
Spaniards were driven from island after island of the West Indies. 

The Virgin Islands, although claimed by Spain, never actually 
came into her possession, and hence escaped being fought for and 
successively lost and won. But through all the years when warfare 
was carried on, the Virgin Islands were a favorite resort and place of 
refuge for the buccaneers. It is certain they were not always 
unwelcome, for Denmark had no love for Spain, and the lavish 
expenditures of the freebooters went to the enrichment of the 
Danish merchants. 

For Americans interest in the West Indies is heightened by the 
fact that one of our greatest statesmen was a native of these islands. 
Alexander Hamilton was born in 1757 on the island of Nevis, an 
English possession. When he was five years old he was taken to the 
island 01 St. Croix, where he remained until he was 15 years of age. 
He was then sent to the United States to finish his education, where 
he remained until his tragic death in 1804. 

ACQUISITION. 

For more than 50 years the acquisition of the Virgin Islands has 
been a subject of negotiations between the United States and Den- 
mark. These negotiations began in 1865, during the administra- 
tion of President Lincoln. Secretary Seward became especially 
anxious to secure them. The fact that during the war between the 
States St. Thomas was a harbor of refuge for southern privateers 
and blockade runners impressed him with their strategic value. 
In 1866 he visited the islands and soon thereafter made Denmark 
an offer of $5, 000,000 for the group. Denmark offered to sell them 
for $15, 000,000, or to sell St. Thomas and St. John for $10,000,000. 
Finally Secretary Seward agreed to pay $7,500,000 for the two. 
This was finally agreed to by Denmark and the treaty was signed. 
It was promptly ratified by Denmark, but after long delay the 
Senate finally declined to ratify. 

During the administration of President Harrison the purchase of 
the islands was again considered, and again during President Cleve- 
land's administration, but no definite steps were taken. 

In 1898 the Senate Committee on Foreign Relations authorized 
the President to purchase the islands for use as a naval and coaling 
station. As a result of further negotiations a treaty was negotiated 
by Mr. Hay for the cession of the islands to the United States for 
$5,000,000. The treaty was ratified by the Senate of the United 
States, but failed of confirmation by the Danish Rigsdag. 

In 1915 Secretary Lansing entered again into negotiations for the 
purchase of the islands. A treaty was signed and finally ratified 
January 17, 1917, and the islands came into the possession of the , 
United States March 3, 1917, the consideration being $25,000,000. 

It is, of course, generally understood that the United States did 
not purchase the Virgin Islands as an investment. They were pur- 
chased primarily for strategic purposes. St. Thomas and its harbor 
is the strongest and most easily fortified spot in the West Indies. It 
can be made for us both an impregnable fortress and a valuable 
commercial and shipping station. 



O CONDITIONS IN THE VIRGIN ISLANDS. 

TREATY AND ACT PROVIDING FOR TEMPORARY GOVERNMENT. 

The treaty provides that His Majesty the King of Denmark cedes 
to the United States all territory possessed by Denmark in the 
West Indies, together with all Government property and public 
buildings. All private rights in lands and property are to remain 
undisturbed by the transfer. Reservation is made of arms and 
military stores, and the furniture and movables in the public build- 
ings. Certain concessions are specified and reserved, especially that 
to the Danish West Indian Bank to issue bank notes. 

Danish citizens may remain in the islands or remove at will. 
Those who remain may preserve their citizenship in Denmark by 
making a declaration of record to that effect, and in default of such 
declaration they shall be held to have renounced it and to have 
accepted citizenship in the United States. 

The act of Congress approved March 3, 1917, to provide a temporary 
government for the Virgin Islands declares that "all military, civil, 
and judicial powers necessary to govern the West Indian Islands 
acquired from Denmark shall be vested in a governor, and in such 
person or persons as the President may appoint, and shall be exer- 
cised in such manner as the President shall direct until Congress 
shall provide for the government of said islands." 

It is further provided that the laws in force at the time of the 
cession shall remain in operation "until Congress shall otherwise 
provide." There are various other provisions not necessary to 
specify. 

The government established under this act has continued the 
system established under Danish rule with little change except in 
administration. 

The islands constitute two municipalities, one consisting of St. 
Thomas and St. John, and the other of St. Croix. 

Legislative authority in each municipality is vested in a Colonial 
Council. The qualifications for the franchise are that the voter must 
be a male citizen 25 years of age; he must own real estate producing 
a monthly income of $5 or have a personal income of $300 a year; 
and he must be of unblemished character. The electorate is very 
limited, and there is a demand from the people for an enlargement 
of the franchise. 

There are the usual subordinate executive officers and a judicial 
system which sadly needs revision; 

Some time ago a commission to revise the laws was appointed. 
This commission has practically completed the work, which is in 
every way creditable and which will bring about a thorough Ameri- 
canization of the laws, if adopted. 

POPULATION. 

Soon after the American occupation a census of the Virgin Islands 
acquired by the United States was taken by the Bureau of the Census 
as of November 1, 1917. The actual work of enumeration was done 
by residents of the islands. The total population, as shown by this 
census, was 26,051. The. population of St. Croix was nearly 15,000, 
that of St. Thomas a little over 10,000, and that of St. John about 
1,000. 



CONDITIONS IN THE VIRGIN ISLANDS. 9 

There lias been a progressive decrease in the population of the 
islands since 1835, when it was reported at 43,178 . Many causes 
I haw contributed to this decline. There has been a continued excess 
of deaths over births and an excess of emigration over immigration. 
The excess of deaths over births was occasioned principally by the 
high infant mortality rate and the excess of emigration over immi- 
gration was caused by economic conditions which will be discussed 
'later. 

The Virgin Islands acquired by the United States contain three 
cities— Charlotte Amalie, on the island of St. Thomas, and Christian- 
sted and Fredericksted, on the island of St. Croix. The population 
of Charlotte Amalie is now about 9,000, that of Christiansted about 
5,000, and that of Fredericksted about 3,000, the population of 
the islands being about 60 per cent urban and 40 per cent rural. 

Of this population only about 2,000, or 7.4 per cent, are white. 
About 20,000, or 80 per cent, are negroes, and about 4,500, or 17.5 
per cent, are mixed. 

The marital conditions on the islands are anomalous and shocking. 
Probablynot more than 15 per cent of the colored population are 
legally married. Consentual marriages, or unions by mutual consent, 
are the rule. Several causes are assigned for this unfortunate con- 
dition, the chief ones being the strong force of custom, which has 
prevailed since the days of slavery; the high cost of a legal or church 
marriage which formerly prevailed; and the absence of public senti- 
ment against such unions. It is needless to say that such conditions 
have created a low moral tone among that class of the population, 
especially injurious to children compelled to grow up in such an 
atmosphere, and degrading to the women, who can look forward to 
such a life with only apprehension and distrust. 

The total number of families in the islands, as reported, was 9,568. 
The total number of dwellings was 5,858. 

About 15,000 persons over 10 years of age are engaged in gainful 
occupations, or about 69 per cent. Eighty-two per cent of the males 
are so engaged and 58 per cent of the females. In St. Croix the 
principal occupation is farm labor, men and women both working in 
tin 1 fields on the plantations. In St. Thomas the principal occupa- 
tions arc those connected with the harbor, both sexes being engaged 
in the work. The conditions affecting labor will be hereafter more 
fulh' considered . 

religion. 

There are a number of churches in the islands. The church 
buildings are substantial and the church-going population reasonably 
large. Under Danish rule the Moravian Church was the established 
church of the islands, to the support of which the Government con- 
tributed. Upon our accession government contributions, of course, 
were ended. There are many adherents of the Catholic faith in the 
islands; also Episcopalians and Lutherans. 

MORALS. 

The morals of these islands are at a very low ebb. Indeed, the 
amount of immorality is rather appalling. We have referred briefly 
to this heretofore. This goes back to the old days of slavery in the 
islands when men and women were regarded as chattels and they 



10 CONDITIONS IN T.M'K VIIUilN ISLANDS. 

were expected to breed as many children as they could i<» seci 
laborers in the fields. Now ninny persons live together bv mutual 
consent and withoul any legal or religious ceremony. There has 
been up bo this time apparently little public sentiment against such 
anions. A very high percentage, estimated to be over 60 per cent 
of the children born in the islands, are illegitimate. One of the great 
needs is the development of a sentimonl against this form of im- 
morality; and we believe there is some change taking place as the 
people are coming to understand American ideals. There have been 
more marriages in the lasl year than heretofore. On the (question 
of morals we quote from the evidence of Mr. Ralph <lc Chabert, a 
witness before the commission. 

Mr. Campbell. Now, as to the question of their living together as husbands and 
wives; are there more ol them married now than there were formerly? 

Mr. On aukkt. 5Tes, than there used to be years ago, hut Lt can ^lill be better. 

Mr. Campbell. Ahout what percentage of them are married? 

Mr. Chabert. I can not tell exactly, bu1 a very small percentage. 

Mr. Campbell. Do many of the fathers abandon their families? 

Mr. Chabert, Well, not so many, I Hunk the condition is improving. 

Mr. Campbell. Could you, as president of the labor union, a man holding the 
fortunes of these people, help to better that condition and induce these people to 
establish family relations on the approved Christian plan? 

Mr. Chabert. Oh, yes; that is coming, and it will come, and all our energies have 

to be devoted in trying to better the eco nic condition, 'Thai is a general feeling; 

before they get married they ought to have :i few dollars and make some cakes to 
entertain their friends, or buy something to put into,the house, some pieces of furniture. 

Mr. Campbell, Is (here anything in connection with the fees for the marriage 
license or lees for the marriage ceremony that stands in the way? 

Mr. ( IhABERT. No; I here was never any I'ee until recently, and I Ihink it is 10 cents. 
But a man who has a, room, perhaps not :• good mattress or perhaps not a good table in 
his house, he does not care lo marry to n. family unl.il he raises a, few dollars, 

Mr. Campbell. But he will lake a woman (here to live with him without marrying? 

Mr. Chabert. Yes. 

Mr. Campbell. And they go on living In that way and raise a family. 

Mr. Chabert. Thai- is something that has been going on In the past from the time 
of slavery, when the men and women were really held as chattels, and they wauled 
them to breed as many children as they could to work in the fields on the estates, and 

they used t0 have a gOOd many children l»y the laborers a ml Ihe managers, SO there 
was nothing immoral about il to both the planter and Ihe laborers. II in only now 

that the people are being taught something about themselves that you see a change 
beginning to talce place, and that change will naturally come on gradually. 

(Testimony, pp, to.">, 494, and 495 of the record.) 

AGRICULTURE. 

The soil <>f these islands is very fertile, especially that of St. Croix • 
The chief crops are sugar cane, guinea grass, a variety of vegetables, 

corn, <lrv brans, hay and forage, COttOn, and arrowroot. There is 

evidence that in the days gone by in the island of St. Thomas, sugar, 
tobacco, and coffee have been grown. The people seem to have 
abandoned these things and relied upon the harbor. Vegetables 
for the household are easily grown, but the people import them from 
Tortola and Porto Rico. There are apparently few gardens in this 

island. There have been in the past sno;iir plantations, but none 

now. The experimental station in St. Croix is doing good work, 

and with SOme additional funds can extend (heir work over the 

islands of St. Thomas and St. John. The people need education in 
the extermination of pests and in the development of truck farming, 
and especially gardens for their own use. Concentrated lime juice 



< ONDH [02STS US THE VTJ&GIK [SLAND , I I 

i made from the lime grown in St. John, Trees bear prolincally. 
Pickle lime . an edible commodity, i i al <> produced, and i w ell known 
in ome octions of the United States, [n the island of Si Croix the 
ii lution i omewhal different. Agriculture •■ pecially ugar has 
been developed to a con iderable extent. The sugar is largeij in 
t bo hand ot q few companie 

Thou iand of acre of land in St. John and H. Thoma i should be 
ii od for the cultivation of pineapples and banana 

The cattle indu itry could be further developed upon these island . 
On all the i land i there are about 10,000 head of cattle 2,800 in t. 
Thoma I 100 in 3t. John, and aboui 5,000 in Si Croi 

The live took on the islands consists of the following: Cattle, 
horse , mule a e and burro twine, thecp, goal i, poultry, and al to 
colonics of bees. -Eggs, honey, and was are some of the producl i 
obi ained in fairly large quantil i< 

Agriculture commenced to decline in St. Thomas in the sixties 
when the ugar price went flown. The curse of these islands as of 
the other West Indies has been the question of absentee ownership 
and the desire of the owners to imply gel w hal I hey 6ould out of the 
i land withoul looking to the welfare of the people. 

Agriculture has been injured by the cutting of the timber, tt has 
cned the rainfall and the moisture has not been retained. The 
pain run of] while formerly it loaked into the ground. 

St. Croix is by far the richest land agriculturally, According to 
our Census Bureau's returns there are in St. Croix £9,200 acres of 
farm land of tin-, s alue of 13,706,91 I . 

In St. Croix ugar cane, cotton, fruits, including cocoanuts and 
pineapple and garden truck, -ill can be produced. There i a groat 
deal of land in this i iland that can be cultivated. More hogs could 
\><- rai jed, and thai indusl ry should be stimulated. Corn can also be 
produced. 

I John is adapted to the raising of figs, bananas, pineapples and 
cotton. The island can produce seal-island cotton. They 1 
thereon mango trees, apricots, alligator pears, and a few pineapples. 
None of the le to an\ large extent. They are rai ting some vegetables 
on this i tland. Before the importation of the mongoose thej raised 
large quantith of turkeys, chickens, and various fowls. The mon- 

icm to ha • e taken po <■ i tion of the i tland so far as the i • 
ing of fowls i concerned. A greater development of agriculture in 
these i lands will result in more ' There is great possibility in 

the development in St. John of pineapples, bananas, onion, and 
cabbage if tran portation facilities can be provided. 

A large number of tracts of land are owned by those who do nor. 
live in St. John. It may be -.veil to particularize as to the carious 
items of producl ion. 

Sugar cane. For man i rar cane ha been the only crop 

thai yielded anything for export. The largesi amount of tugar that 
has been exported in the lasl 15 as in 1903, and consisted of 

19,27/5 *horl ton E periments are being made at presenl in 
veloping ■< cane thai will \><- better mited to the toil and climatic 
conditions than any rarietie now being grown. Mnch pi 
hat been made in ilii-. direction. In the cultivation of the cane 
chemical fertilizers have been of no advantage. The general char- 
acter of the agricultural operation on the Virgin I tland 1 1 indicated 



12 CONDITIONS IN THE VIRGIN ISLANDS. 

by the fact that more than four-fifths (84.6 per cent) of the total 
value of crops in 1917 was represented by sugar cane. "The pro- 
duction of sugar in 1917-18 was 5,400 long tons (2,240 pounds); in 
1918-19, 9,000 tons; in 1919-20, 12,000 tons." (From- Willet and 
Gray.) 

Cotton. — In 1913 there were some 2,000 acres devoted to sea-island 
cotton, but owing to the appearance of insect pests in the fields, 
financial loss was threatened, and since that year cotton raising has 
been temporarily abandoned. Among the varieties of cotton grown 
may be mentioned the following: "Sterling S" and "Cameron 106;" 
a variety known as "Sakellarides," and an upland cotton known as 
"Southern Cross." The land suitable for cotton lies very largely 
on the south side of the island of St. Croix, though a portion of the 
north side is also well adapted for it. It is estimated that there are 
about 5,000 acres that might be profitably cultivated. 

Experimental crops. — One of the most interesting of the experi- 
ments has been the growing of sweet sorghum, the sucrose content 
of which is said to have been successfully crystallized by the experi- 
mental station on the island. This crop is planted by sowing the 
seed, and is reaped by machinery, and the labor during the cultiva- 
tion and harvesting of this crop is much less than that of sugar cane. 
The chief miscellaneous crops that are receiving the attention of the 
agricultural station are those suitable for food, fodder, or green 
dressing. For green dressing there are Lyon beans and cowpeas; 
for food there are sweet potatoes and maize; and for fodder there are 
spineless cactus (the latter has been found to be unsuccessful on the 
islands because it grows slowly and is subject to the attack of pests), 
several varieties of sorghum, and, most important of all, imphee. 
The last named is highly recommended as a rotation crop for cane 
and cotton, especially the latter. It is especially desired as stock 
feed and for the large amount of usable manure that can be returned 
to the land. The imphee thus does double duty by feeding the cattle 
and enriching the soil. 

Tropical fruits and nuts. — The chief fruits grown on the islands are 
the following: Coconuts, cocoa, mangoes, bananas, oranges, pine- 
apples, and a variety of unclassified fruits. A small production of 
grapes is also grown. 

Outside of the question of transportation and adequate water 
supply, the development of agriculture in these islands challenges 
primarily the attention of our Government. The first step to accom- 
plish larger agricultural production would be the further extension of 
the agricultural experimental station. 

MANUFACTURES. 

There are very few manufacturing establishments. . The bay-rum 
industry has been developed to a considerable extent at St. Thomas 
and at St. John. St. Croix has been famous for the Santa Cruz rum. 
St. Thomas bay rum is famous the world over. The industry, how- 
ever, is suffering because of the want of shipping facilities. It is 
estimated that from $100,000 to $120,000 per annum worth of bay 
rum is exported to the United States, Porto Rico, and foreign islands. 
A large portion of the bay rum of commerce comes from the Danish 
West Indies. The bay tree . (piementa acris) grows profusely in 



CONDITIONS IN THE VIRGIN ISLANDS. 13 

certain parts of the island of St. John. The essential oil of bay is 
obtained from the leaves of the bay tree. From these leaves the oil 
is extracted. Bay rum is made by mixing bay oil with rum or 
alcohol and water. Before the war the steamers of the Hamburg- 
American Line carried this bay rum all over the West Indies and to 
continental America. That transportation is now ended. 

( )nc of the bay-rum manufacturers testified before the commission 
that he had an order for $3,000 worth of bay rum lying unexecuted 
for six months on account of the want of shipping facilities. On the 
island of St. Croix there are many sugar-cane mills. While the census 
gives s I manufacturing establishments in the islands, they are rather 
inconsequential outside of those we have herein referred to. The 
sugar mills are, of course, the most important. 

FISHING. 

Fishing affords to many of the people of St. John their living. St. 
John seems to be one of those unusual and (to the mind of some) 
desirable places where people can live without working. They can 
catch fish, go into the woods and pick fruit from the trees, and get 
along. Work does not seem to bother many of them. The fishing 
industry is also developed in the other islands. It is done by sail- 
boats and rowboats. According to the census of 1917, there were 28 
sailboats and 176 rowboats used for fishing operations. This industry 
could be developed to a further extent, provided markets could be 
found, all of which inheres in the primary question of transportation. 

GOVERNMENT UNDER THE NAVY. 

The commission can not speak too highly of the work done by the 
Navy in carrying on the government of the islands. Hampered by 
the iack of funds, faced with new problems unique and difficult, the 
work of the Navy in these islands will be a proud page in its history. 

Before the taking over of the islands the hospital at St. Thomas 
was merely a hospital in name. Dr. Christensen says in his testi- 
mony before the commission, "It was in reality more of a poorhouse 
than anything else. It was a place where people with chronic 
diseases were attended to." 

The present municipal hospital at St. Thomas provides free treat- 
ment for any who desire to come, and manj^ avail themselves of this 
opportunity. Formerly under Danish rule, the inhabitants were 
afraid to go to the hospital. Now, under the splendid rule of the 
American medical staff, they are eager to go. The American Red 
Gross has helped with magnificent gifts and the result in the hospitals 
has been such as to give the people of the islands confidence in the 
American Government. 

Under the wise policy of the Medical Department of the Navy the 
death rate has shown a marked decrease, especially in infant mor- 
tality. On the Island of St. Thomas the death rate was — 

From 1901 to 1905, 32 per thousand. 

From 1906 to 1910, it was 32.7 per thousand. 

From 1911 to 1915, it was 31.7. 

In 1916 it was 21.8. 



14 CONDITIONS IF THE VIKGIN ISLANDS. 

In 1917 its mortality was 40.3. (That was accounted for largely 
by the hurricane which swept over these islands and people were com- 
pelled to live under very dangerous conditions after the hurricane.) 

In 1918 the death rate dropped to 24.3. 

In 1919 the general death rate was 17.3 per cent; a remarkable 
showing. This relates only to the island of St. Thomas. 

The infant mortality statistics are even more startling. During 
the calendar year 1919 there were 300 children born in St. Thomas 
and 41 in St. John. During the same period there occurred 176 
deaths in St. Thomas and 12 in St. John. 

The death rate in both islands is lower than for any previous year 
during which deaths have been recorded. 

Infant mortality has decreased one-half since our occupany of 
these islands. 

The medical officers in charge, to the extent of their financial 
support by the Government, have tried to teach the people sanita- 
tion. It is hard to bring about complete sanitation without a 
sewerage system — one of the things most needed in the island in 
connection with sufficient water supply. In the island of St. Thomas 
they are making some efforts to establish a sewerage system. All 
agree that some plan must be worked out along this line. 

When it was noted that typhoid fever has practically been stamped 
out by vaccination; that malaria has become almost unknown; that 
hundreds of operations have been performed in the hospitals and many 
lives saved; with the astounding decrease in infant mortality that 
has taken place; and venereal diseases lessened, one can realize the 
splendid work inspired by an absolute missionary spirit that the 
medical staff of the Navy has carried on in these islands. And 
grateful mention should likewise be made of the work of the Red 
Cross. 

The medical service in St. Croix is in charge of a chief municipal 
physician with the rank of lieutenant, and he is assisted by four 
municipal physicians of similar rank. There are two hospitals, one 
at Frederiksted and the other at Christiansted. There is an insane 
asylum and Richmond sick house under the collective name of 
" Richmond Sick House," and also a leper asylum. The equipment 
in the hospitals at Frederiksted and Christiansted is satisfactory, and 
both are doing good work. We present some of the testimony of Mr. 
Coulter : 

The Chairman. There has been a great improvement in the health and sanitary 
conditions of the island? 

Mr. Coulter. It would be impossible to describe to you in words the wonderful 
improvement that has taken place in that department of this island. As a member of 
this council and as a representative of the municipal committee and the hospital 
commissioned in Frederiksted for a series of years, I was thoroughly familiar with the 
conditions that existed in Frederiksted as a member of the hospital commission during 
the Danish administration and after the American flag came here, which was on the 
31st of March, 1917, and I took over the position of inspector of the municipal hospital 
in Frederiksted on the 15th of July. Dr. Hakansson, who is now chief municipal 
physician in St. Thomas, was the first American physician that came to these islands 
that took over the position of municipal physician in Frederiksted just about two 
weeks after I was inspector of the hospital there. 

The Chairman. And you have a hospital there and a hospital at Christiansted? 

Mr. Coulter. Yes, sir. There is also a leprous island situated about a mile out of 
town, and an insane asylum. There are one or two things that I would like to state 
to you. There was a question asked the chairman of the labor union to-day in con- 
nection with the infant mortality in the island. So far as he was said, he was notable 



CONDITIONS IN THE VIRGIN ISLANDS. 15 

to answer what the infant mortality in these islands was previous to the American 
occupation of the islands. As a member of his counsel, of the three elected to go to 
Denmark at the time of the question of the transfer of these islands, I thought it was 
my duty "to do so as a delegate, to get all the information possible concerning such 
matters in the island which they might ask the delegates about, and I discovered 
then thai the statistics concerning infant mortality in 1916 were 62 per cent on this 
island. Very recently, just before being transferred from my position to the police 
department, one of my duties was to make an annual report for the health department 
fur 1!)!!). 1 think I can say that the infant mortality on this island has decreased 
about 10 per cent since the American occupation. Those are the figures that were 
given to me at the time, and I think, if I remember right, the exact amount was 62.34 
per cent. The decrease has been about 40 per cent, and being transferred from one 
department to the other I havenot had the time to get the exact figures. 

The Chairman. About 38 per'cent, isn't it? 

Mr. Coulter. Yes, sir; about that. 

'Flic < 'uairmax. Well, you consider that a pretty good thing, don't you? 

Mr. Coulter. I should say it is. It reflects credit upon the Navy Department 
and the Medical Department of the naval administration of this island. I want to 
say to you gentlemen of the congressional commission that, this is entirely due to the 
increased force of the very efficient doctors which has been put in operation by the 
Medical Department, by the appointment of midwives in the municipal hospital, 
by the placing of an ambulance in the island, and the midwives in the residence towns 
of tins island, and all the managers of the estates are given instructions as soon as a 
laborer comes on their estate that if they are hurt they shall call up the hospital and 
call for the ambulance. The women are transferred to the hospital, and there is 
established in each hospital a maternity ward exclusively for maternity cases, and 
after the delivery is made, about 10 days after, the mother is sent out from the hospital 
with instructions to report weekly to the hospital with their infants, and there is an 
inspection and the infants are weighed and observed every week in the hospital on 
those cases. 

(Testimony, pp. 502-504.) 

Mr. Coulter. Exactly. I would like to say one word more to go in the record 
that I think that the health department of this island, with the Navy Department, 
through its medical officers, has accomplished the most wonderful work that could 
have been expected, and they deserve the highest commendation and greatest credit — 
all of the officials of the Navy Department in the island of St. Croix. 

(Testimony, pp. 506-507.) 

Speaking of the hospitals, Mr. Nolte said: 

I know of the difficult work that they have been doing and have been trying to do 
even before we got the splendid assistance, and I want to ask any man who has the 
interest of the country at heart if he thinks, by cutting off this source of good living 
and real help to the health of the people, that he will be doing the right thing in 
saying "take it away." Just let me make that mention of the hospital question 
Where everybody with one voice has nothing but praise, where mothers are received 
without one cent of compensation, where they have every benefit, every comfort 
that "money and skill can provide. Yes, there are people who wish it to be taken 
away. That is something that I could enlarge upon, but I won't. I feel sure that 
we are satisfied, and I feel sure that we will all say that it is something we can com- 
pliment the Government on. I wonder if there is anybody who would like to see 
that dissipated? That could never be the will of the majority of the people. Is 
there anybody who would like to see that band disbanded? We feel proiid in saying 
that they are our boys, our native boys, and nobody on due reflection would want to 
see it done away with as it is. 

(Testimony, p. 298.) 

One of the best pieces of work done by the Navy has been the v 
development of a splendid band — -one at St. Thomas and one at 
St. Croix. These young men in the bands are moral, enterprising, 
and set a good example to the other young men of the islands. There 
is a great ambition among them to become members of the bands. 
Great credit is due to Commander White for his work along these 
lines. 



16 CONDITIONS IN THE VIRGIN ISLANDS. 

LAWS. 

The laws in the Virgin Islands date back three centuries and to al 
large extent are inapplicable to our form of government. The I 
laws are made by colonial councils. St. Thomas and St. John com- 
prise one council district with 15 members, 4 of whom are appointed 
by the governor and the others elected. St. Croix has a council of 
18 members, 5 of whom are appointed by the governor and the 
balance elected. The laws are antiquated Danish laws. There are 
men occupying positions in the council of the Virgin Islands who 
took advantage of the act to retain Danish citizenship under the 
provisions of the treaty between Denmark and the United States. 
This should not be permitted; it is un-American. The judge of the 
court is police master, a member of the colonial tax commission, a 
member of the colonial council, also is hi charge of deeds and mort- 
gages of record. As police master he institutes cases which are tried 
before him. This is an un-American policy. There is a great need 
of an entire new code of laws. This has been prepared and we trust 
soon may be adopted. We insert under this title a letter of the 
Secretary of the Navy to Judge Towner: 

Replying to the committee's letter of October 15, 1919, inclosing a bill (S. J. Res. 
69) "Appointing a commission to report on conditions in the Virgin Islands," and 
requesting the views and recommendations of the department thereon, I have the 
honor to inform you that the department is in favor of this proposed commission 
and feels that such investigation of conditions in these islands will result in much 
good. 

There are a number of important matters pertaining to the government of the 
Virgin Islands that the department desires to call to your attention in this connec- 
tion. Under the provisions of the act of March 3, 1917 (39 Stat., 1132), all military, 
civil, and judicial powers necessary to govern these islands are vested in a governor 
and such person or persons as the President may appoint, and are to be exercised in 
such a manner as the President shall direct until Congress shall provide otherwise 
for their government. It is also provided in this act that all laws not directly in 
conflict -with the sovereignty of the United States of America shall remain in force 
until such time as Congress shall otherwise provide. 

While these temporary provisions were wholly wise and necessary for their govern- 
ment during the transition period, i. e., transfer from the sovereignty of Denmark 
to the sovereignty of the United States of America, the department feels that the 
time has arrived when some more permanent provision should be made for their 
government. It is considered of primary importance that Congress should organize 
the legislative, executive, and judicial departments of the Government on a more 
permanent and lasting basis by establishing a single assembly for all the islands and 
granting to it such powers as may be necessary to enable it to legislate upon such 
questions as affect the greater part of the island group. It has been found practically 
impossible to obtain legislation on a given point for all the islands -with the colonial 
councils acting separately as at the present time. 

The present judicial system of the islands, which is primarily the system that 
existed before the transfer, should be reorganized and simplified and the system of 
laws, many of which are antiquated and unknown to our system of judicial procedure, 
should be codified and modernized. This is particularly true of the laws regulating 
taxes, -which are so drawn that land permitted to lie idle and unproductive is abso- 
lutely free from taxation, while the burden of taxation falls most heavily upon the 
land in cultivation and sustaining extensive improvements. Such laws discourage 
building and agricultural advancement and are therefore very detrimental to thrift 
and industry. "A revision of these laws that would place a premium upon production 
and improvements and cause the burden to fall heaviest upon the idle estates of 
absentee landlords would soon render the islands self-supporting and thus serve to 
reduce the calls upon Congress for further appropriations to maintain the essential 
governmental activities therein. 

Your attention is specially invited to the necessity for establishing direct sea-borne 
communication at regular intervals in the coasting trade between these islands and 



CONDITIONS IN THE VIRGIN ISLANDS. 17 

(important ports of the United States. This communication is now maintained by 

three British steamships of the Quebec Steamship Line, which are permitted to 

! iei ween New York and the Virgin Islands by virtue of the act of October 6, 1917 

3tat., 392), which authorizes foreign ships to engage in the coastwise trade of the 

l ni'i'l States until 120 days after the war has ended. This date is now near at hand, 

and if regular sea-borne communication between these islands and the United States 

is to be continued it will be necessary to make some further provision for it until such 

tame as the exchange of commodities is sufficient to attract ships at regular intervals. 

All the foregoing, together with many other matters, could be investigated to a very 

great advantage by a commission such as is proposed in bill S. J. Res. 59, and the 

department recommends that it be enacted. 

Sincerely, yours, 

Josephus Daniels, 
Secretary of the Navy. 

LABOR. 

According to the testimony there are about 4,000 able-bodied 
laborers on the island of St. Thomas; about 7,000 on the island of 
St. Croix. A large percentage of these people belong to the unions. 
The labor unions in St. Croix have about 5,000 members, a majority 
of them being females. In St. Thomas one labor union has a member- 
ship of 3,000 and the other, which is affiliated with the American 
Federation of Labor, about 900. In St. Croix they have a paper, of 
which Mr. D. Hamilton Jackson is editor. The labor unions in St. 
Croix own about 2,200 acres of land — about 400 acres under cultiva- 
tion and 1,800 acres of it used for pasture. This is partly rented out 
to workers. There is quite a heavy indebtedness against the land. 
Some of the commission visited some of the towns upon this land and 
found misery and want prevalent. On the island of St. Thomas there 
is a small group with radical ideas — rather noisy, and much given to 
speech making. Labor has in the past been paid a very small wage. 
Many of the laborers have gone to Santo Domingo and to Cuba. The 
planters are mostly foreigners, and they have held labor down, 
apparently, to less than a living wage. As late as 1916 the average 
first-class workman earned about 25 cents per day; the second- 
class laborer 15 and 12 cents per day. Now wages have gone up to 
around $1 per day. There is considerable spirit of unrest among tne 
laboring people on the islands — a spirit which is engendered and 
maintained by a number of radicals who themselves seem to perform 
little labor. The conditions under which the laboring men and their 
families live are not good. We set out portions of the testimony of 
Mr. Ralph de Chabert, president of the labor union of St. Croix, as 
such testimony appears on pages 484 to 486 of the transcript: 

The Chairmax. Tell us now what you have to say about bettering conditions; 
what have you tried to do to improve labor conditions? 

Mr. Chabert. Well, thousands of laborers were living under the worst conditions: 
they were paid about 20 or 25 cents a day, and they were ill treated at the hands of 
the employer. Up to early in 1916 they were paid 20 or 25 cents a day, and they 
were increased from 25 to 30 for four days' work and 35 for five days' work, 30 cents 
a day if you work four days or less. We ran on without another change for about a 
year, and then it was increased from 35 to 40 cents, and we ran for more than a year, 
and then it was increased to 50 cents. 

The Chairman. How long did that run'? 

Mr. Chabert. Pretty nearly two years, and then it was increased to a dollar. I 
have lived here all my life. 

The Chairman. When these men and women were earning 25 cents a day how did 
they live? 

H. Doc. 734, 66-2 2 



18 CONDITIONS IN THE VIRGIN ISLANDS. 

Mr. Chabert. They were half starved, and infant mortality can explain thai 
There was a very large infant mortality in the island, and the Government investi I 
gated the condition, and also Dr. Longfield Smith had a committee of the Govern, 
ment, Secretary Baumann was the doctor, and they found that the infant mortality ] 
was the result of malnutrition, malnutrition of infants in mothers. 

The Chairman. What was the rate of infant mortality, do you know? 

Mr. Chabert. I do not know the exact rate of infant mortality, but I know that' 
the population decreased at the rate of 300 annually, and I think the majority of it 
was due to infant mortality and emigration. There was a good deal more sickness 
then than at present. 

The Chairman. Did these people working on 25 cents a day have any kind of 
homes? 

Mr. Chabert. Oh, no; just two boxes, or a few pieces of boards to lie on, and they 
had families. The husband and the wife both worked, so they that could get the 
50 cents a day, and when the mother was sick or the father was sick there was only 
25 cents a day to support the family. 

The Chairman. Now, are the people getting along pretty well on a dollar a day? 

Mr. Chabert. Well, it has just been started, but they will get along very much 
better, but even now they can not live on a dollar a day, but it is better. 

The Chairman. Is that paid in American money? 

Mr. Chabert. No; in the francs, the local currency. It will help in this way, the 
father can work and the mother can work, and if they have any big children they 
all can work, and by putting all their earnings together, it will be pretty good. 

The Chairman. There is plenty of work in the islands? 

Mr. Chabert. Just at the present time there is. 

The Chairman. Anyone can find work who wants to work at a dollar a day? 

Mr. Chabert. Yes, sir. 

The Chairman. Are the children working? 

Mr. Chabert. Well, the school children are doing a little work, like working 
among the big worms or parasites, and pulling up little weeds, and they get a few 
cents for that, and when they leave school, there are two grades, the second class, one 
called class A, and another class called class B, and class A gets 50 cents a day, and 
class B 75 cents a day. 

(Testimony, pp. 484-486.) 

TAXATION. 

The tax laws are inadequate, inefficient, and unjust. If an Ameri- 
can system of taxation were established the islands could in all 
probability in a few years become self-supporting./ It would seem 
wise, if necessary, that a tax expert be sent, at the expense of this 
Government, to take up this question and assist them in working 
out a tax system. There is no tax on moneys and credits. There 
is a peculiar tax known as the trade tax assessed on merchants and 
traders doing business, according to the volume of the business. 
There are taxes on ferryboats, horses and carriages, and motor cars. 
There is an income tax under which a single man is exempted up to 
$900 a year and a married man up to $1,800 a year. Allowance is 
made for children under 17. It is a gradual, ascending tax accord- 
ing to the income. This goes to the government of the island and is 
levied under laws passed by the council. Business houses are as- 
sessed on the floor space and rental value. Farm lands are assessed 
on acreage. There are no taxes upon ground not under cultivation. 
Pasturage is figured according to the number of cattle and horses. 
It is claimed by one witness, Mr. Jackson, that the machinery in the 
different sugar plants does not bear a fair rate of taxation. Accord- 
ing to Bureau of Census repoits, as testified to by him, the value is 
$10n,149, but in fact, as claimed in his textimony, the value is over 
a million dollars. This indicates a situation as to the tax laws that 
needs remedying. 



CONDITIONS IN THE VIRGIN ISLANDS. 19 

The tariff laws are not the same governing the ports of St. Croix 
nd of St. Thomas. There is a fixed tariff on different articles of 
nerchandise that are dutiable coming into the port of St. Thomas 
if per cent ad valorem; while at St. Croix it ranges from 5 per cent 
i.o 25 per cent ad valorem and from 1 per cent to 10 per cent specific. 
I mods brought to St. Thomas and subsequently shipped to St. Croix 
pay a duty of 15 per cent. There is an export duty from St. Croix 
of $8 per ton upon sugar. The people can import material from the 
United States without the payment of import duty. The amount 
of income tax has been far short of what was estimated would be col- 
lected. "We arc 1 rather of the opinion that in some way the payment 
of income taxes has been avoided, and it would be well that a thor- 
ough investigation be made of this subject. We have pointed out 
enough in the tax laws to suggest that the entire system of taxation 
needs revision, and this country is greatly interested in the proposi- 
tion because the deficit in carrying on the government is met by the 
United States, and this amounts to over $200,000 per year. We 
insert here as bearing on this question a little of Mr. Boschulto's 
testimony: 

The Chairman. And you have 6,700 acres on which you produce nothing and on 
which you pay no taxes? 

Mr. Boschulto. Yes, sir. 

The Chairmax. And you would be willing to sell little tracts of that land? 

Mr. Boschulto. If I could get it all taken up I would sell. Now, here is what I 
want to show now [exhibiting some photographs]. You want to get them on the land. 

The Chairman. Are there many more tracts of 1,000 acres owned by different 
people in the island? 

Mr. Boschulto. Yes; there is some. I could not tell you how many. 

The Chairman. There seems to be a good deal of desire here to get some lands here, 
is then'.' 

Mr. Boschulto. Yes, sir. 

The Chairman. There is complaint that the laws are such that men like yourself 
who own large tracts of land do not pay taxes on the undeveloped land, and do not 
want to sell the land, and consequently the people can not get the land. 

Mr. Boschulto. I can not get them to take the land for love or money. They do 
not want to. 

The Chairman. Would you be willing to sell tracts of land if you thought they 
would work it? 

Mr. Boschulto. Yes. sir. • 

The Chairman. Those people who rented it; did they work the land? 

Mr. Boschulto. Yes. sir; 25 or 30 years ago. 

The Chairman. And you think the people would do it now? 

Mr. Boschulto. They probably would. Here are some of the leases on the land 
[submitting papers]. 

(Testimony, p. 148.) 

We also quote from the testimony of this man wherein he enunciated 
the somewhat novel proposition that the people were too proud to 
work: 

The Chairman. Are you willing to sell any of your land? 

Mr. Boschulto. Yes; it depends on the price. 

The Chairman. Will your sell it at a fair price? 

Mr. Boschulto. Yes, sir. And I am willing to lease. 

The Chairman. Would you be willing to sell it at a price that might be fixed by 
three impartial men as to the value of the land? 

Mr. Boschulto. No. 

The Chairman. You would not do that? 

Mr. Boschulto. No. 

Mr. Campbell. You pay taxes on your improved land and no taxes on your unim- 
proved land: is that true? 

Mr. Boschulto. Yes. 



\ v 



20 CONDITIONS IN THE VIRGIN ISLANDS. 

Mr. Campbell. Out in Kansas we pay taxes on all our land, whether it is improyl 
or not. What objection do you have to paying taxes on yours? i* 

Mr. Boschulto. If you are going to tax the uncultivated land, then do not tax t% 
cultivated land. 1 

Mr. Campbell. No; tax it at its value. Tax it at a reasonable value and impose 
reasonable tax upon the property for local purposes, such as food, keeping up tli.\ 
poor farm, the roads, such purposes as taxes are imposed on lands in all of our States. 

Mr. Boschulto. Well, I know that we are pretty well taxed now. 

Mr. Campbell. You are not taxed at all on this land that is not under cultivation. 

Mr. Boschulto. Well, if you were to try it, there are plenty of landowners here 
that will not be able to pay it. 

Mr. Campbell. Then, they would sell? 

Mr. Boschulto. Yes, sir; and it would be going from bad to worse. 

Mr. Garrett. What is the basis for the taxation on land? 

Mr. Boschulto. I am not sure, but I think it is 32 cents an acre. 

Mr. Garrett. Is it based on the value or the quantity? 

Mr. Boschulto. On the acreage. 

Mr. Garrett. And all cultivated lands are assessed the same without any reference 
to then location or quality? 

(Testimony, pp. 156-157.) 

The evidence of Lieut. O'Hagan will help to give a picture of the 
tax situation. We present a portion of his testimony: 

The Chairman. Can you clear up this tax question? 

Lieut. O'Hagan. I think so. W T e have here in St. Croix what amounts essentially 
to a single-tax system, but there is one tax imposed on land; the amount of tax depends 
altogether on the character of the lands. The tax is 3J francs, 50 bits for land in cul- 
tivation, crop cultivation or cane, and a tax of 66f bits, or the equivalent of 16 cents, 
in normal times on pasture land, and a tax of 5 bits per acre, the equivalent of a cent 
in normal times, on uncultivated land. With the exception of the horse, carriage, and 
boat tax, we have nothing which is the equivalent of what is known as a property 
tax anywhere else, and with the exception of 10 cents per acre, which has been going 
into the immigration fund, and the little that accrues from the income-tax fund, 
those are all the taxes that are paid, and it figures out a matter of about less than 1 per 
cent on the valuation. In town property ■ 

Mr. Towner. Does that mean 1 per cent on the valuation of the total property of 
the island, including real and personal estate? 

Lieut. O'Hagan. Yes. 

Mr. Towner. And intangible property as well? 

Lieut. O'Hagan. Yes, sir; everything — machinery, cattle, land, houses, personal 
property, and furniture. 

Mr. Towner. How do you reach that estimate? 

Lieut. O'Hagan. By figuring it. 

The Chairman. How do you fix the valuation? 

Lieut. O'Hagan. Well, there is no real method of fixing the valuation. The best 
method I found in arriving at the valuation is by taking the amount which the 
national bank of the Danish West Indies will loan on the property as being 40 per 
cent of the valuation of that property. I had to assume sdme figure, and I used this. 

The Chairman. Take the case of machinery for sugar-cane factories, there would 
be no particular tax on that either as real estate or personal property? 

Lieut. O'Hagan. Except perhaps a little tax in the way of import duty when it 
comes in originally. 

The Chairman. We had testimony this morning that personal property of that 
kind was in the census figures at a little more than §100,000 when it was worlh a 
million and a half. 

Lieut. O'Hagan. It might have appeared in the census as a piece of information, 
but, not as a tax proposition . 

The Chairman. It would not affect the tax proposition at all? 

Lieut. O'Hagan. No, sir. 

The Chairman. There is no poll tax? 

Lieut. O'Hagan. No, sir. 

The Chairman. Now, we would like to have you clear up the income tax. 

Lieut. O'Hagan. It has been in operation for only one year. The income tax for 
1919. The returns were made and collected. 

The Chairman. How much was paid in 1018? 

Lieut. O'Hagan. 32,000 francs, approximately $6,000. 



CONDITIONS IN THE VIRGIN ISLANDS. 21 

The Chairman. Ajid that covered all of the individuals and the corporations on 

is island? 

Lieut. < I'Hagan. Yes, sir. 
]T!m" Chairman. And the corporations capitalized for a couple of million dollars? 
. Lirut. O'Hagan. They have large capitalization, and 1 endeavored to get a return 

the tax from a concern in Copenhagen, but I had no reply. It was probably taken 
.'.p ilin.u' .■'■ diplomatic channels. 

The Chairman. How much lax are you claiming; on that? 

! ieut. (ill \i..w. If my reoollection serves me right, something like 4,000 francs. 

The Chairman. There eeeius to be an impression that some of these concerns are 
LTiiiif out of paying their income tax. 

Lieut. <> Hagan. I made no investigation of tne last income tax when I came, 
because when I came hero it was completed. 

The < 'hairman. Y<ui think it would lie a good idea to have an inspector from the 
Treasury Departrnenl of tne United States come down here? 

Lieul O'Hagan. I have recommended some such thing in the collection of this 
pie-< nt tax. and I do .'hot know whether one has been detailed or not. 

The Chairman 1 . It is pretty hard for the United States to appropriate a lot of money 
to help dlnrx'x the island if the corporations are not paying their share of the tuxes. 

Lieut. O'Hagan. It would seem so. You will notice by referring to the last year's 
budget and this year's budget that the amount listed in there is expected to come 
from these corporations. 

The I haiumax. From your knowledge of the affairs of this island and the business 
of this island and the corporations of this island and the individuals of this island, 
do you think that S6.000 is a fair income tax return? 

Lieut. O'Hagan. Emphatically no. 

The Chairman. Will you give us your judgment as to what it should be? 

Lieut. O'Hagan. Well, based on the merest conjecture, I should say, taking into 
consideration about $2,000,000 worth of sugar from the fields, it ought to represent 
s< imething like $40,000. 

(Testimony, pp. 448-451.) 

We also insert portions of the testimony of Mr. Bornn on this 
subject: 

The t 'haiumax. Is there any tax on lands in the country? 

Mr. Bornn. Yes; there is a tax on lands in the country, but I am speaking about 
the towns; the dwellings and the stores and all of the buildings are taxed, but the 
value La nol assessed for taxation. The tax is divided into three sections; first there is 
what we call the building tax; the property pays 2 cents a square ell on the area it 
ci »vers. I am not prepared to say just how much that is, but I think it is four square 
or about two two feet. Then the same property pays according to the rental 
received, and it is charged 4 per cent, and then of the amount that is collected on 
rentals 25 per cent is charged for paying the electric light of the town. That is how 
the real estate pays taxation in the town. 

The ('haiumax. Is the furniture in the house paying taxes? 

Mr. Bornn. Xo. The building tax is paid according to the area the building covers, 
and it amounts to §11; the house tax, which is paid according to the rental, amounts to 
about $7, and the land tax is one-fourth of that $7, or $1.75. That is, a building that 
pays about seventeen or eighteen dollars a year tax. The house tax varies, of 
course, according to the value of the real estate and the rental received and the 
building tax remaining the same regardless of how the property value goes up or 
down. 

Senator Edge. What is the value of that property approximately? 

Mr. Bornn: That hi >use is w< >rth about two thousand dollars, including the land and 
all. and pays about 9 per cent. I think many houses pay about 10 per cent taxes, 
and the largest buildings here in many cases receive a smaller rental, and therefore 
pay a larger proportion of the taxes, because even if the rental is a small amount, the 
area 1 icing large, that property tax remains high. 

The < haiumax. Do you pay any tax on the stock of goods? 

Mr. Bornn. Xo. 

The (haiumax. On the floor space? 

Mr. Bornn. No, but the space that the whole building covers. Some properties 
pay as much as 20 or 25 per cent of the rental value. 

Senator Edge. And how do you fix the rental value in the annual estimate? 



22 CONDITIONS IN THE VIRGIN ISLANDS. i'i 

Mr. Bornn. The annual estimate, it goes to the tax commission and they accept 
that valuation or give it their own valuation. 

The Chairman. What constitutes the tax commission? 

Mr. Bornn. There are several tax commissions. We are speaking of the real estate 
tax commission. It is as follows: The Colonial Council takes two men for each part 
of the town and sit with the governor's secretary and receive these reports. 

The Chairman. And they find whether it is a fair return. 

Mr. Bornn. The town is divided into three quarters, and that tax commission, I 
think Monday they commence to sit at this part of the town, and that is called the 
King's quarter, and the commission will sit on Monday, Tuesday, and Wednesday, I 
think. Then three days after the commission sits for the middle part of the town, 
which is called Queen's quarter. 

Senator Edge. On what theory do you exempt this uncultivated property? 

Mr. Bornn. I do not know. It gives no revenue to the owner, and we have been 
in such distressful circumstances that it was impossible to build, and rents were so 
low that at one time it was impossible to build any new houses. 

Senator Edge. Are you still of the opinion that it is the correct theory, in view of 
all the testimonv that vou have listened to here, particularlv relating to uncultivated 
lands? 

Mr. Bornn. I am going to take that up when we come to the estates. 

(Testimony, pp. 260, 261, 262.) 

It may be of interest likewise to note the testimony of Mr. D. 
Hamilton Jackson, a labor leader, on the subject of the islands being 
self-supporting in connection with this proposition: 

When it is said that the islands can not support themselves, I am of the opinion 
that the matter has not been carefully studied. Eor instance, according to the United 
States Census Bureau returns, there were in St. Croix alone 49,206 acres of farm land, 
with a value based at $3,706,911, including buildings, or an average of $60 per acre. 
At this rate the value of farm land in St. Croix would be $2,9^2,316. But this is in 
theory, and put in practice we find farm lands selling for $80 per acre on the average. 
As an evidence of this, an estate of 600 acres has just been sold for $28,000. 

Again, I find that the average value of the farm is put down at $8,621, and yet, 
using the average price of $60 per acre as sent out by the Census Bureau, I find that 
the estate just mentioned should have been put down at an average of $36,000. If 
the figures used by the Census Commission are according to the register, it will be 
plainly seen by any man who has two eyes set liorizonatlly in his head that a reassess- 
ment of the value of land is necessary in these days. Also I find the value of imple- 
ments and machinery put down for the three islands as $106,649. This, to me, is a 
big joke, when it is taken into consideration that the machinery at Bethlehem factory 
was worth at that time nearly a million dollars. 

The Chairman, What year was that? 

Mr. Jackson. That is 1917, with a steam plow valued at $28,000, a motor plow 
valued at $1,000. Then, we have the machinerv at the Central Factory valued at 
nearlv $300,000, La Granee Central valued at nearly $200,000, Hogensbors; Works at 
$10,000, Whims Works at $8,000, and Diamond's at $6,000, Clifton Hill at $4,000, or 
in all of a worth $1, 500,000 in machinery and implements alone. 

The ChairmAxV. Are taxes paid on personal property of that kind? 

Mr. Jackson. No; on the real estate. 

The Chairman. The real estate attached to the property? 

Mr. Jackson. Real estate. In 1917 the sugar crop was estimated at $442,120. 
Last year St. Croix shipped over $1,000,000. This year it is expected the sugar manu- 
factured in the island will reach a value of $2,000,000. You can now look at the farm- 
land value in the island, and then turn to the budget, and we will see that the revenue 
frorn this source is alarmingly small, not more than about $24,000, not taking into 
consideration the thousands of uncultivated acres not taxed. It is my opinion that 
the taxation is unequal — some pay too little, while others pay too much. For instance, 
you have a property owner in town paying $97 a year taxes on $8,000 worth of property, 
while an estate of 120 acres pays only a matter of $37. It must also be understood 
that at present on most of the plantations agriculture is carried on in the most primitive 
way, and consequently poor results attend them. 

(Testimony, pp. 337-330,) 

At St. Thomas it was urged upon the commission that St. Thomas 
be made a free port — that it would greatly stimulate business in 



CONDITIONS IN THE VIRGIN ISLANDS. 23 

: tie islands and help to briny; St. Thomas back to its old-time position. 
There is but little trade left at St. Thomas. In the oid days when 
i here was much bunkering of boats in this splendid harbor it was a 
place of great activity and one of the noted places of the West Indies. 
While there is probably some romantic exaggeration in Gertrude 
Athei ton's description of St. Thomas given in "The Conqueror, " 
vet it is true that St. Thomas was a proud city with great activities, 
now only a dream. The blight of lessened business is seen every- 
where. Goods from America are free. There is a 6 per cent tariff 
on foreign goods. This produces only about $7,000 a year. Under 
the Danish system customs and revenues amounted to something 
like $40,000. in 1010 there was $540,000 worth of coal imported. 
This was used in bunkering the boats. That has gone down now 
to almost nothing. A free port might turn this poverty-stricken 
place into a flourishing community. The people ot St. Thomas are 
practically dependent upon the harbor, and the question of a free 
port is one for serious consideration. There are difficulties, of course, . 
in the way, as undoubtedly the people of St. Croix would feel they 
should have a free port if St. Thomas had one. We offer this merely 
as a suggestion for future consideration. In this connection we 
attach some of the testimony of Mr. Le Roy Nolte before the com- 
mission: 

The first point now is about the harbor. On this committee we have arranged two 
things, the harbor affairs and retaining the naval administration. You have, no 
doubt, heard a great deal about St. Thomas and its harbor. It is to us — that is, the 
harbor to our life is as the heart is to our bodies. It is the commercial pulse of the 
island. When it is filled we work, and when it is empty we feel it. When it is full 
we feel better. That harbor, to our great regret, has been going slowly and slowly 
down. I won't take you back to those days when it required towboats to get vessels 
out of the port, but it will give you an idea. 

The Chairman. That lias been within your memory? 

Mr. Nolte. A good deal of it. I used to be a newsboy and I took the papers to my 
customers every morning. I have known 37 deep-sea vessels to arrive here between 
Saturday night and Monday morning. Our harbor was not large enough to accom- 
modate the ships. The harbor has been going down gradually, due to changes, the 
opening of communication, telegraphing, and one thing and another, and it has made 
our port dwindle. Time passed and it was on the decline. Many things were tried 
to save it, and one of the things that greatly hampered our trade was the competition 
that gradually sprung up among the British Islands. It still continues. Among the 
things which helped greatly, was the establishment many years ago of the steamship 
line and it has been one of the greatest sources of our prosperity. The development of 
that line meant the development of the town and the island in general. They were 
very prosperous, and so were we. Gradually when the war came that prosperity 
commenced to decline and it has been changed since then. Prior to that we find that 
the sources of our prosperity, the one on top of the list, would be coal. As I have 
enumerated, and you may have noticed in that article, Mr. Chairman, and I needn't 
go over them again, because the sources on every side have not only been reduced, 
I nit the principal ones have gone, and it is hard for one to say anything better. 
I want to call your attention to the fact that we have practically nothing to depend 
upon, even the harbor is an uncertain quantity, and that is one of the reasons why we 
plead for the retention of the Navy. We have been reduced from 10,000 tons of coal 
in a month to 9,000 in six months. More eloquent figures of the decline of the trade 
could not be furnished. We were connected by steam five or six times a month with 
Europe, and all over the world almost every day, and we had a large passenger trade, 
tourists by thousands, and you know what American tourists mean. Alt of those 
things we have simply had to close our eyes to" and smile and await developments 
and hide the tears. Latterly prohibition ha? played it= part. I do. not champion 
that cause one way or the other. It has been enacted and is to be respected, whatever 
differences there may be about it. 
The Chairman. What is the law now? 



24 CONDITIONS m THE VIRGIN ISLANDS. 

Mr. Nolte. It is that all traffic in liquor of every kind, excepting malt liquors, is 
forbidden, but I want to say that through prohibition it has struck a heavy blow, 
especially in the matter of the foreign shipping trade. It is one of the latest blows 
that the shipping trade has received. It has crippled the trade here, because it was 
a legitimate trade, no matter what harm it did. I have the figures snowing a con- 
siderable amount of trade in that, and I have been told with some accuracy and 
authority that some vessels do not call here on that account. A passenger on a tourist 
ship from New York City told me the other day, a gentleman of standing, from all 
appearances, he had expected 300 tourists on that steamboat and 22 arrived, and he 
told me in a conversation in the Grand Hotel that the reason was that it was a dry 
boat. Now, going back to figures, you will see that from 120,000 tons of coal a year 
prior to the war we have been reduced to almost nothing. There is, with regard to 
the loss of income from prohibition and other causes, a general falling off in trade, and 
we find our budget shows a paltry $72,000 income estimated, including $18,000 income 
tax. If we look forward to a decline, we may see a decline in all of our revenue. But 
what I want to emphasize in regard to the harbor is that we be given some means to 
promote that. We ask the commission to take into consideration the making of the 
harbor as free as possible and to limit or avoid the application of any measure or rule 
that might apply on American regulation rules or American tariff: that would only 
hamper things. We want to be as free as we can, because the cheaper we can get 
things out of the harbor the greater the inducement and the greater the chance of 
retaining the mere remnants of trade that now remain. 

Senator Edge. Won't you amplify your statement as to just what the embargo is 
now in the harbor existing to-day, so that the Congressmen may reach an understanding 
of the situation now? 

Mr. Nolte. The situation now is that we have 6 per cent duty or> imported, foreign 
imported, goods. Everything from America is free. There is a tariff between St. 
Thomas and St. Croix that admits certain things free of duty. There is much infor- 
mation on that point and it may be received from recent works published by the 
Department of Commerce. We have a tariff on foreign goods, and we are afraid that 
if the application of a tariff should interfere with these cheap rates, and it is practi- 
cally an open harbor, or it is very small — we want to avoid any application of a 
stronger tariff. 

Senator Edge. What you desire now is the elimination of the 6 per cent tariff? 

Mr. Nolte. If possible. 

The Chairman. Do you want a free harbor? 

Mr. Nolte. As free as you can make it. 

Senator Edge. Is that the only present tariff on imports, 6 per cent? 

Mr. Nolte. On foreign goods ad valorem, and we want to eliminate that. Of 
course a free harbor, in another sense, is that you create an opportunity for manu- 
facturing and one thing and another and I will refer you to one of the committee in 
regard to that. 

The Chairman. What is your definition of a free harbor? 

Mr. Nolte. Where everything is free and there is opportunity for importing and 
manufacturing and reexporting at a cheap rate. 

Mr. Campbell. Who fixed the 6 per cent rate? 

Mr. Nolte. It was fixed by this council with the authority of the governor. 

Mr. Campbell. How much revenue do you derive from that? 

Mr. Nolte. It used to be about $40,000 a year before the American transfer. 

Mr. Campbell. At this time, I mean, is it that much? 

Mr. Nolte. No; at this time it is about $7,000, and that is for foreign goods. 

(Testimony pp. 93 to 97.) 

We quote this because it seems to give a good idea of the situation 
as to the harbor. A study of the trade statistics from 1900 to 1917 
show a very small amount of exports and imports between the 
islands and the United States. Most of the islands' production went 
elsewhere and our exports to the islands are simply coal. 

We attach a statement of custom duties received at the custom 
nouse at St. Thomas. 



CONDITIONS IN THE VIKGIN ISLANDS. 25 

Statt nn at qf dutu s and sundry revenues — Islands of St. Thomas and St. John. 
FROM APR. 1, 1917, TO JUNE 30, 1918. 



April 

May 

June 

July 

August 

September 

October 

November . 
i lecember . 
January . . . 
February . . 

March 

April 

.May 

June 

Total 



Ship's 
dues. 



S.1.SS6.9.-. 
:>. Old. 20 
2, 769. 20 
2.864.95 
.3.76S.20 
s', 012. 90 
2, cm;. 70 
6. 252. 95 
2,351.75 
1,699.50 
3, 300. 00 
2, 728. 40 
l.s.V.1. 15 
3, 474. 35 
2, 608. 15 



59,209.35 



Animal 
inspec- 
tion. 



s-;uii. ::.-, 
346. 95 
3 19. 1 15 
2S2..S0 
355. 00 
353. 60 
322. 05 
314. 55 
264. 95 
204. 50 
180. 05 
246.60 
245. 65 
209. 20 
219. 05 



4, 194. 95 



Duties. 



Invoice 
and cer- 
tificates. 



$7,149.45 
9, 206. 90 
8,031.45 
2,910.55 
6, 656. 00 
7, 270. 50 
5,071.05 
5, 003. 90 

10, 757. 10 
4,258.85 
3; 329. 40 

20, 164. 15 

13,216.30 
7,096.15 
3,360.60 



$32. 75 
217. 60 
95.90 

S.S.5U 

97.00 
140. 00 
49.50 
105. 00 
66.50 
91.50 
75.50 
113.50 
42.00 
32.00 
99.00 



113,482.35 1,346.25 



Extra 

service 

and fines. 



$80.00 

130. 00 
10.00 



60.00 

80.50 
144.00 

92.00 
110. 00 
121.00 
147.00 
142. 00 

76.00 



1,192.50 



Interest 
and ex- 
change. 



$6. 50 
2.65 
2.00 
2.90 
2.60 
2.40 
.70 
1.10 



13.85 
.75 
.60 

1.00 
.20 

1.10 



38.35 



Sale of 
blanks. 



$25. 70 
15. 45 
17.10 
6.30 



Total. 



$13,376.00 
15, 770. 30 
11,378.20 

6,159.70 
10,878.80 
15, 809. 40 

8,215.70 
11, 773. 45 
13,601.40 

6,366.50 

6,995.70 
23,374.25 
18,511.10 
10,953.90 

6,363.90 



179, 528. 30 



JULY 1, 1918, TO JUNE 30, 1919. 



July 

August. . . 
September 
ociober... 
November 
December. 
January... 
February. 
If arch..... 

April 

May 

June 



$2, 686. 05 
1, 3S7. 60 
5,350.15 
3,914.20 
4, 944. 95 
9, 614. 20 
9, 2S7. 75 
2, 068. 75 
2, 069. 95 
2, 640. 05 
2, 659. 80 
3, 239. 90 



49, 863. 35 



$316.30 
264.10 
272. 20 
339. 00 
318. 95 
327. 70 
259. 40 
235. 95 
198. 55 
200. 20 
283. 05 
3S7. 50 



3, 402. 90 



$4, 228. 45 

2, 769. 30 
2, 037. 85 
4, 923. 40 
2, 640. 00 
6. 864. 05 
2, 004. 65 
1, S02.40 
6,911.35 
3, 189. 00 
4, 070. 10 

3, 295. 10 



44, 735. 65 



$60. 50 
30.00 
84.00 
20.00 
21.00 
57.00 

205. 30 
25.00 
62.00 
28.10 
62.40 
41.40 



696. 70 



$305. 00 
211.00 
224. 50 
142. 00 
237. 00 
249.00 
175. 10 
148. 00 
146. 00 
164. 00 
249. 00 
305. 00 



2, 555. 60 



$0.70 
4.70 
.80 
.60 
.50 
.80 
.40 
.80 



.80 



$120. 00 
225. 00 
315.00 
165. 00 
130. 00 
175. 00 



1, 130. 00 



$7, 597. 00 
4, 666. 70 
7, 969. 50 
9, 339. 20 
8, 162. 40 
17,112.75 
12. 052. 60 
4; 505. 90 
9, 702. 85 
6,387.15 
7, 454. 35 
7, 443. 90 



102, 394. 30 



JULY 1, 1919, TO DEC. 31, 1919. 



July 


SI, 611. 40 
5, 325. 45 
1.574.65 

13. 373. 50 
8,613.35 
7, 847. 10 


$381. 05 
492. 65 
455. 80 
402. 50 
566. 20 
452. 10 


$2, 324. 60 
7, 622. 70 
2, 805. 10 
3, 768. 15 
3. 744. 80 
7; 255. 10 


$100. 40 
22.90 
15.60 
30.85 
24.90 
100. 65 


$253. 00 
254. 00 
259. 00 
265. 00 
445.00 
645.00 


$24.85 


$95. 00 
135. 00 
160. 00 
155. 00 
345. 00 
435. 00 


$4, 790. 30 
13, 852. 70 
5, 270. 15 


September 




October 




17, 995. 00 
13 739 25 










16 734.95 










3S, 345. 45 


2, 750. 30 


27, 520. 45 


295.30 


2, 121. 00 


24.85 


1, 325. 00 


72. 382. 35 



THE COAL QUESTION. 



CloseJy connected with the harbor situation is the coal question. 

At the time the commission visited St. Thomas there were only 
about 400 tons of coal there and we found there was practically an 
embargo on coal. It seemed impossible to secure it for the ships 
that came into the harbor. Most of the ships, however, even our 
own. were going past St. Thomas for coaling at the Barbados. The 
facilities, according to the testimony of Commander Laub, were 
better at St. Thomas than at the Barbados. They could be coaled 
at St. Thomas with an average speed of 100 to 125 tons an hour, 
while at the Barbados they could not exceed one-half of that amount. 

The commission took this question up with the Shipping Board 
upon our return and asked lor an explanation. It was stated that 
the Barbados beins; nearer the Argentine boats could coal there for 



26 CONDITIONS IN THE VIRGIN ISLANDS. 

the round trip, and could not do so at St. Thomas. Whatever the 
reason may be, the matter has now been remedied and Judge Payne 
of the Shipping Board informed the committee that as far as practi-_ 
cable our boats would coal at St. Thomas. It may be a little more 
expensive, but the question of the life of the people of St. Thomas is 
involved in this matter. 

The testimony before us was to the effect that tnis government 
would be compelled to ration the people within three or four weeks 
unless the bunkering of coal for our boats was resumed as the great 
industry of St. Thomas. 

Orders have now been issued for the sending of a large amount of 
coal there and we trust it will relieve this situation. 

WATER. 

One of the paramount questions involved in the development of 
the health and happiness of these islands is an adequate water supply. 
The well water there is not good. The people are dependent upon 
cisterns, iron receptacles, and barrels for drinking water. The 
greatest misfortune of these islands is the lack of water. It has been 
so bad that one year it was necessary to import water. Nor can 
any adequate system of sanitation be carried out until this question 
is met. Some effort has been made looking to the construction of a 
reservoir in the mountains at St. Thomas and plans are being worked 
out for a water system. It is estimated that a proper water system 
for St. Thomas will cost about $250,000; probably nearly as much for 
St. Croix. This is a vastly more important question to these people 
than the question of civil government. Some way must be found 
for our Government to cooperate with the people of these islands in 
solving this, the most important question involved in their situation. 

EDUCATION. 

The Danish system of public schools has been continued under the 
American occupancy. Attendance is compulsory between the ages of 
7 and 13 years. Fines are levied against both the parents and 
children for the unexcused absence of the latter from school. The 
language used in the schools in practically all the classes is English. 
Instruction above the grades is not given, although the able and effi- 
cient director, Mr. Henry C. Blair, hopes to establish this year two or 
three high schools with a three-year course, if funds can be obtained. 

There are about 3,500 pupils enrolled in all the grades, but regular 
attendance is impossible because of lack of schoolhouses and teachers. 
Some of the children are allowed to attend in the morning and others 
in the afternoon, and some have difficulty in attending school at all. 
In Charlotte Amalie they have made over for school purposes an old 
Lutheran chapel, an old Moravian church, and an old hospital. It 
is exceedingly difficult to obtain teachers, first, on account of living 
conditions, and, second, on account of the small salaries paid. The 
average salary paid now is about $25 per month and the teachers are 
nearly all natives. The director hopes that by the establishment of 
the high schools which he contemplates he may prepare those who 
will be qualified to teach the grades throughout the islands. 

There has been very little vocational training given the pupils so far, 
tut a commencement has been made, and if funds can be secured it 



CONDITIONS IN THE VIRGIN ISLANDS. 27 

will be extended as rapidly as possible. This training with some work 
in domestic economy is among their greatest educational needs. The 
director states that they should have at least four times the amount 
now expended on the schools to bring them anywhere near the Amer- 
ican standard. They have almost no apparatus; no desks are in the 
schools except a few in one of the town schools. The students sit on 
wooden benches without backs. They have not enough books for the 
pupils. 

WJi ile for many reasons the interest in education in the islands is not 
what it should be, the children are bright, learn easily, and are easily 
interested. The parents want their children educated, but are very 
ready to have them leave the schools if they can secure work in the 
iields at 30 cents a day. On the whole, the director believes that the 
outlook is encouraging if they can but secure the necessary funds. 

It is especially encouraging that the children are very much inter- 
ested in the United States and are very patriotic. The history of the 
United States is taught in even the grades, and the children can sing 
our national airs even better than can many of our own school 
children. ~ 

A great need of the islands is the establishment of libraries for the 
three principal towns. When the American director took charge of 
the schools three years ago there were not available to the pupils, the 
teachers, or the public even a dictionary or an encyclopedia or any 
scientific or technical works or works of general literature of any kind. 
It is encouraging to know that the Junior Ked Cross in the United 
States has become interested and by 1-cent contributions is trying to 
send some books to the islands. 

LANDS. 

According to the census of 1917, the area in acres of land was as 
follows : 

Area in acreSi 

St. Thomas 18, 080 

St. John 12, 780 

St. Croix 53, 913 

84, 773 
Acres infanns, census 1917. 

St. Thomas 10, 683 

St. John 10, 003 

St. Croix 49, 206 

69, 892 
82 per cent of the total area. 

Area infanns, census 1917. 

Farms of 5 acres and under 219 

Farms of 5 acres up to 1,000 195 

Farms of 1,000 acres and over 16 

Suitable for sugar cane. 

Acres. 

St. Thomas, 60 per cent of farm area 6, 500 

St. John, 50 per cent of farm area 5, 0C0 

St. ( roix, 70 per cent of farm area 34, 500 

Total 46, 000 

Available for other crops , 23, 892 



28 CONDITIONS IN THE VIRGIN ISLANDS. || 

We found much complaint among the people because they could 
not secure small tracts of land. Much of the land is held in large 
tracts, some by nonresidents. Uncultivated lands are untaxed. This 
is not conducive to the sale of the land and the working out of the 
problem of securing small tracts of land by people of small means. 
There is very little leased land on the islands. Some of the owners 
claim that those who talk about leasing will not work the lands. 
Others claim there is a distinct desire to get back to the land. Mr. 
Hoist, a very substantial witness, testified that some years ago $5 
an acre was about the average value of the soil in St. Thomas. Tracts 
of it were purchased by people and they seem now unwilling to part 
with it. Some of the owners seem to feel that by holding the land 
for 20 or 30 years they will get fabulous prices for it. One witness 
stated that he did not think any land could be purchased in St. 
Thomas. A system of taxation on uncultivated land might change 
the idea of some of these owners. During the administration of 
Gov. Oliver an- attempt was made to work out a plan for leasing of 
lands. Maj. Dyer, acting for Gov. Oliver, made arrangements 
whereby people could secure these lands for leasing by applying to 
the governor. He stated in his evidence that not a single applica- 
tion was ever received. 

ROADS. 

There are about a hundred miles of roads on the island of St. 
Thomas. One-third could be used by vehicles, a very small number 
by automobiles, and the balance on horseback. The development of 
roads is a very necessary thing. It was estimated by some of the 
Danish engineers before we took over the islands that the expense 
of putting the roads in decently good order in St. Thomas would be 
about $2,000 a mile. Others estimate it at $5,000 a mile. A good 
road system in this island is necessary to its proper development. 
St. Croix is different in having a fairly good system. Likewise, in 
St. John, travel can only be undertaken by horseback. The develop- 
ment of roads would not only be helpful to the people of the islands 
but would help develop a tourist trade. With the acquisition of 
water and the development of good roads and hotel facilities these 
islands might become a great resort for the people of the United 
States. Certainly the climate would be appealing to them. 

IMMIGRATION. 

There has been considerable trouble in the islands, especially in 
St. Croix, with reference to immigration. St. Croix has what is 
known as an "immigration fund," and there is now on hand in this 
fund something like $121,000. This grew out of a law passed many 
years ago under Danish rule for the purpose of stimulating immigra- 
tion into the islands. 

The law provided for the imposition of 10 cents per acre on every 
acre of useable land in St. Croix to be used in promoting the agricul- 
tural interests of the island through the importation of foreign labor 
when necessity demanded it or otherwise. Lawbreakers and unde- 
sirable characters from other islands were sent to St. Croix and the 
labor supply exceeded the demand. 



CONDITIONS IN THE VIRGIN ISLANDS. 29 

Upon our acquisition of the islands the importation of laborers 
was absolutely prohibited by executive order made by the governor. 
The theory of the order was that there was no shortage of labor in 
St. Croix if the people were willing to work. 

This fund has grown to the figures hereinbefore stated, and the 
question of the disposition of this fund is one of importance to the 
people there. Whether under the act it can be used for roads or 
other purposes in the stimulation of agriculture is, perhaps, a doubtful 
question, but one that must be worked out by the legal authorities. 
We attach hereto a statement presented to the commission by Mr. 
A. J. Blackwood, representing a municipal committee of St. Croix. 
The immigration problem has been rather serious owing to the fact 
that there are at present no immigration laws in the islands by which 
undesirables may be kept out. There are no immigration inspectors. 
Cases of contagious diseases have been admitted which have been 
refused at other ports of the United States. These matters have 
been brought to the attention of the Public Health Service of the 
United States through local representatives of the department at 
St. Thomas, but there has been no way devised to remedy this. 
This is a problem needing immediate attention. 

THE ST. CROIX IMMIGRATION FUND, 

A draft of a law for raising this fund was introduced in the Colonial Council meeting 
held Monday, July 10. 1854, by Planter Frank Newton, then owner of the estate 
Castle, and member of the Colonial Council. 

The mover, Mr. Newton, explained fully the urgent necessity of the proposed 
institution, and based the same on statistical statements showing an annual decrease 
of the number of laborers. 

The total number of laborers were : 
In the year — 

1841 16, 632 

1846 , 15, 328 

1850 13, 745 

1852 13, 291 

1853 12, 865 

Thus in 12 years the number was reduced with above 4,000 individuals, besides 
deducting from the present number about 3,000 unable laborers; he subsequently 
pointed out, that the want of laborers has caused, that the present crop, in spite of the 
favorable weather, was only a middling one, about 12,000 hogsheads, while it, in case 
the same force was available as in the year 1846-47, without doubt, would have 
amounted to 20,000 hogsheads. This retrogradation had taken. place notwithstanding 
the plant era had spared neither trouble nor expense in order to make up for the wanting 
force of labor by machinery and cattle, and by improved agriculture. 

These wise old planters voluntarily agreed to the imposition of 10 cents per acre 
on every acre of usable land as a special tax for a special fund for a local purpose, 
viz. the upkeep of the agricultural interests of the island, through the importation 
of foreign labor when necessity demanded it. or otherwise. 

The local government seeing the necessity were in full sympathy with the move, 
and on the 6th day of June, 1862, His Majesty King Frederik the Seventh, sanctioned 
an ordinance for raising funds in aid of immigration to the island of St. Croix. 

The introduction of the ordinance reads as follows: Make known: On the report 
of our minister of finances, who has laid before us the most submissive report of the 
Colonial Council for our West India possessions on a draft of ordinance for raising 
funds in aid of immigration to the islands of St. Croix, we most graciously decree: 

Paragraph 1: In order to promote the introduction of laborers from foreign places 
to the island of St. Croix, a separate fund, to be called the immigration fund, shall be 
provided for by the Land Treasury of St. Croix, out of which the expenses connected 
with such importation of laborers shall be defrayed. 

Paragraph 2: Deals with the method of raising the fund and of liquidating the 
original debt, which has all been accomplished so need not be quoted here. 



30 CONDITIONS IN THE VIRGIN ISLANDS. ' 

Paragraph 3: The following taxes and revenues shall be assigned to the immigration' 
fund : 

(a) The tax imposed by the ordinance of 13th September, 1855, paragraph 2-A, to 
the Land Treasury of 10 cents on every acre of landed property in the island, with the 
sole exception of such land that can be proved to be of no use or value whatever, for 
the year 1861 and subsequent years. 

(b) The amount of the above-mentioned tax which has been collected for the years 
1859-60, pursuant to the ordinance of the 24th April, 1860, and which has hitherto 
not been applied for defraying expenses connected with the importation of laborers to 
the island; 

(c) An annual subsidy from the Land Treasury, to be paid from other revenues of 
the said treasury, and to amount to so much, that the revenue enacted under letter a 
shall together with the subsidy amount to $6,000 per annum. 

(d) This section was last amended by the ordinance of the 13 of February, 1873, 
prescribing that the person employing the laborer for the first year shall defray one- 
third part of the expenses attending the introduction of the immigrant into the island, 
and the remaining two-thirds shall be defrayed by the immigration fund . As no one 
ever contracted an immigrant for the second year, the balance of the paragraph was 
never applied, the fund being in a healthy condition, and the prices of sugar and 
other products very low from 1890 to 1912 the fund was allowed to pay the two-thirds 
and the planter one-third of the expenses of importing laborers. 

Paragraph 4: From the immigration fund shall be defrayed: 

(a) The yearly sums for the gradual paying off of the debts and the interest on the 
loans contracted for providing the fund ; 

(b) All expenses connected with the introduction of laborers from foreign places to 
St. Croix for public account whether these expenses arise directly from the engage- 
ment of laborers, and their passage to the island, or from salaries, payments, or other 
outlays for the above-mentioned purpose. 

(c) Such expenses as may be necessary in order to meet the rights of the immigrants 
to free return-passage, in case they have this right, according to the contract that 
have been entered into on their engagement; 

(d) Bounties to aid' or encourage introduction of laborers from foreign places to the 
island by private arrangement, in case there should be found occasion later to promote 
immigration in this manner. 

The ordinance of July 2, 1866, paragraph 3: The immigration fund shall be adminis- 
tered by the Government, who will every year furnish the Colonial Council with a 
statement of the means belonging to the fund, and also lay before the council for its 
approval an estimate of the revenue and expenditure of the said fund for the following 
financial year. 

The immigration tax, the father of the fund, yields a revenue of $4,800 per annum, 
the annual subsidy mentioned in paragraph 3, section c, that was contributed from 
other revenues of the Colonial Treasury up to 1906, was $1,200 per annum, making the • 
annual contribution to the fund from the tax and subsidy $6,000. 

It would seem that the above should be sufficient to establish the intent and pur- 
pose of the fund and to convince any reasonable mind that it was created for and has 
been maintained as a local institution, for the upkeep of the agricultural interests of 
this island, which is at present and always has been subject to a shortage of field 
laborers and long periods of dry weather which militates very much against produc- 
ing average crops. 

The census of the Virgin Islands of the United States, dated November 1, 1917, 
places the total population of St. Croix at 14,901 and it appears from the table of occu- 
pations, that the field laborers would total about 6,000 of all classes from 10 years old 
and up. Compare this number with Mr. Newton's total of 12,865 in the year 1853, 
and it should be convincing proof that there is serious need of maintaining the immi- 
gration fund for the purpose designed. 

This island has imported steam plows, motor plows, and probably as many labor- 
saving agricultural implements, as any sugar-producing country of a like area,' and 
have made good use of them. 

Planters have always been very zealous in guarding this fund, portions of which 
has been used more or less annually as bureau loans to help planters through the dead 
season, security for the same being given in their crop. And during its long history 
of operation only one small loss of $311.30 has been recorded, which happened through 
crop failure. 

According to the statement of the Government bookkeeper the status of the fund 
on June 30, 1919, was as follows: 



CONDITIONS IN THE VIRGIN ISLANDS. 31 

ASSETS. 

Estate Betty's 11<>]><> A: Coopers Bay, 5 per cent p. a. mortgage §5, 274. 00 

Estate Barren Spot, 5 per cent p. a. mortgage 8, 000. 00 

I Istate Anna's Hope Experiment Station, 5 per cent p. a. mortgage 10, 377. 30 

i'.slalc \ rum's Hope, motor plow 6, 300. 00 

Third Liberty loan bonds, I', per cent 73,500.00 

( 'ash deposited in National Bank of the Banish West Indies 18, 120. 97 

121,572.27 
(Signed) A. J. Blackwood, 

Chairman Municipal Committee St. Croix. 

MAIL AND PASSENGER SERVICE. 

The mail and passenger service to the Virgin Islands from the 
United States is, in a very unsatisfactory condition. The Quebec 
Steamship Co. have from two to three sailings from New York, with 
St. Thomas as their first stop enroute to the British West Indies. 
That has been the. only direct passenger service between the Virgin 
Islands and New York. This line carries mail, but the main mail 
and passenger service is from New York to San Juan, P. R., by steam- 
ships of the New York & Porto Rico Steamship Co., and from San 
Juan to St. Thomas and St. Croix by small sailing craft. Sometimes 
this craft consumes two or three days in making the trip between 
San Juan and St. Thomas. This craft also carries passengers to and 
from San Juan and the Virgin Islands. There is much discontent 
over the situation as to the mail and passenger service. Especially 
is this true of the people of the island of St. John, where the mail 
service has been given up entirely and the people receive no mail 
except as they to go St. Thomas. The post office was abolished 
about nine months ago. It should be stated, however, that the 
amount of mail going to the inhabitants of the island of St. John is 
quite small, there being an average of about 20 letters per week, and 
the service was discontinued partly because of the very large expense 
as compared with the amount of mail and partly because of the 
difficulty in securing its carriage. 

NATIONALIZATION. 

Under the present condition of affairs some of the people on these 
islands, and others who were there at the time of taking over by this 
Government, are in doubt as to their national status and their citi- 
zenship. The commission took this matter up with the State De- 
partment, and attaches hereto a letter from Hon. Frank L. Polk, 
Acting Secretary of State, with reference to this question. The 
State Department holds that the status of the inhabitants of the 
Virgin Islands is similar to that of the Philippine Islands. That is, 
they do not have the civil and political status of citizens of the United 
States, but they do have American nationality and are entitled to 
the protection of the American Government: 

Department of State, 

Washington, March 9, 1920. 
Hon. William S. Kexyox, 

Chairman Joint Commission to Visit the Virgin Islands, 

United States Senate. 
Sir: At a meeting of the Joint Commission to Visit the Virgin Islands, held on 
Tuesday. March 2. you requested the representative of the solicitor's office of this 
department to send you a written statement concerning the citizenship of inhabitants 
of the Virgin Islands. 



32 CONDITIONS m THE VIRGIN ISLANDS. 

I have the honor to quote, for your convenience. Article VI of the treaty between 
the United States and Denmark of January 25, 1917, which reads as follows: 

"Article 6. Danish citizens residing in said islands may remain therein or may 
remove therefrom at will, retaining in either event all their rights of property, includ- 
ing the right to sell or dispose of such property or its proceeds; in case they remain 
in the islands, they shall continue until otherwise provided to enjoy all the private, 
municipal, and religious rights and liberties secured to them by the laws now in force. 
If the present laws are altered, the said inhabitants shall not thereby be placed in 
a less favorable position in respect to the above-mentioned rights and liberties than 
they now enjoy. Those who remain in the islands may preserve their citizenship 
in Denmark by making before a court of record, within one year from the date of the 
exchange of ratifications of this convention, a declaration of then decision to preserve 
such citizenship; in default of which declaration they shall be held to have renounced 
it and to have accepted citizenship in the United States; for children under 18 
years the said declaration may be made by their parents or guardians. Such election 
of Danish citizenship shall not, however, after the lapse of the said term of one year, 
be a bar to their renunciation of their preserved Danish citizenship and their elec- 
tion of citizenship in the United States and admission to the nationality thereof on 
the same terms as may be provided according to the laws of the United States for 
other inhabitants of the islands. 

"The civil rights and the political status of the in habitants of the islands shall be 
determined by the Congress, subject to the stipulations contained in the present 
convention. 

"Danish citizens not residing in the islands but owning property therein at the time 
of the cession shall retain their rights of property, including the right to sell or dispose 
of such property, being placed in this regard on the same basis as the Danish citizens 
residing in the islands and remaining therein or removing therefrom, to whom the 
first paragraph of this article relates." 

As Congress has not yet passed an act determining the civil rights and political status 
of the inhabitants of the islands, the department in issuing passports to inhabitants 
of the Virgin Islands who, under the provision of the treaty, appear to be entitled to 
the protection of this Government, merely describes them as "inhabitants of the 
Virgin Islands entitled to the protection of the United States." The status of such 
persons is considered analogous to that of those inhabitants of the Philippine Islands, 
who, under the provisions of the'treaty with Spain of December 10, 1898, and the act 
of Congress of July 1, 1902, are held to be "citizens of the Philippine Islands, owing 
allegiance to the United States," and are granted passports as such; that is, they have 
American nationality and are entitled to the protection of this Government, but have 
not the civil and political status of citizens of the United States. I have the honor to 
be, sir, 

Your obedient servant, 

Frank L. Polk, Acting Secretary of State. 

CURRENCY QUESTION. 

One of the glaring inconsistencies of the existing conditions in the 
islands, which in its present shape is creating a great spirit of unrest, 
and is absolutely unfair to the population, is the monetary system. 
It is a continuation of the system used under the Danish regime. 
The system was established by a law passed by the Danish Diet, 
which received royal confirmation and assent on March 29, 1904. 
Under this system a specially devised franc composed of 100 bit forms 
the unit. 

The budgets of the two municipalities of the Virgin Islands are 
framed in the legal terms of francs and bit, and the accounting sys- 
tems employ the same terms. Officially, therefore, it may be said 
that the term " dollar" is not used. There is an exception, however, 
for according to an act of Congress approved March 3, 1917, called 
the "organic act," which provides for a temporary government of 
the Virgin Islands of the United States, an export duty of $8 United 
States currency per ton is imposed on all sugar shipped from the 
islands. This export duty, though levied in terms of United States 



CONDITIONS IN THE VIRGIN ISLANDS. 33 

dollars, is actually collected in francs and bit, the conversion rate 
following the prevailing rate of exchange. All other export and 
import duties are levied and collected in terms of francs and bit, and 
all custom collections are deposited to the credit of the municipality 
to which they pertain in the same terms. This procedure is necessary 
because the tariff, with the one exception in the case of the export 
duty on sugar, is the Danish tariff in effect at the time of the transfer 
of the islands to the United States. The local banks transact their 
business and keep their accounts in terms of francs and bit, but 
business men generally operate on a dollar and cents basis, marking 
goods, making sales, and keeping accounts in the same terms. Only 
when they come into financial contact with the Government or in 
their relations with the banks are they required to employ the legal 
nomenclature. 

It will thus be seen that a most anomalous condition exists which 
is very confusing to the uninitiated and proves practical only through 
long acquaintance and use. 

The source of circulation for the money created by the law referred 
to, is provided for in another law passed by the Danish Diet and con- 
firmed by Kiug Christian IX, bearing the same date as the law 
establishing the system, wherein a concession is given to a certain 
Danish association consisting of four Copenhagen banks, to establish 
in the Danish West India islands a joint stock bank, to be known as 
The Danish West Indian National Bank. To this bank, for a period 
of 30 years, or until June, 1934, is given the exclusive right to issue 
bank notes, in terms of francs, which are exchangeable for gold upon 
demand at the head office of the bank in St. Thomas or at the bank's 
agency in Copenhagen. 

A law passed by the Danish Diet and given royal assent on October 
2, 191 ', temporarily suspends the obligation of the Danish West 
Indian National Bank to exchange notes for gold, and contains a 
provision to the effect that "it may be put out of force by royal 
ordinance." In view of the change in sovereignty since the enact- 
ment of this law, the interpretation to be placed on the quoted clause 
is problematical. 

The convention relating to the cession of the Danish West Indies 
to the United States contains in section 4 an obligation on the part 
of the United States to maintain certain concessions and licenses 
given by the Danish Government, amongst which is mentioned (sub- 
paragraph H) the concession to the Danish West Indian National 
Bank. Locally, the impression seems to prevail that this bank has 
something more than a well-defined concession — that it has in fact 
a monopoly to transact a general banking business. Tnere has been 
a number of other local banks doing business which is, of their own 
volition, restricted to the handling of savings accounts, and the 
investment of funds locally in loans secured by realty. The Danish 
West Indian National Bank conducts a general banking business and 
is the only medium of financial intercourse between the \ irgin Islands 
and the outside world, but. it is our judgment, has no monopoly on 
this business, its mononoly being limited solely to the right to issue 
notes in the islands in lieu of com. 

The amount which this bank may issue in bank notes is limited by 
its concession to 10,000,900 francs. As security lor such i:sues two 
H. Doc. 734, 66-2 3 



34 CONDITIONS IN THE VIRGIN ISLANDS. 

conditions are imposed. The first is that it must have in its pos- 
session "a fund in metal" in amount equal to at ieast three-eighths 
of the amount of bank notes in circulation at any time, and the second 
is that the remainder of the notes in circulation not secured by metal 
must be secured by "asset?" other than the "assets' necessary to 
take rare of other obligations. It further provides that the "fund in 
metal" in the islands shall consist of coin. "Assets'' also are defined 
and consist of certain negotiable security of a character in which 
banks generally deal. 

As nearly all of tile commercial business of the Virgin Islands is 
•with the United States, and as all obligations are paid in terms of 
United States dollars, it will readily be seen that only so long as a 
steady and dependable flow of dollar credit back to the islands is 
maintained can local financial conditions remain undisturbed. The 
produce from the islands, principally sugar from St. Croix, is exported 
and disposed of in the New York market, the proceeds of such sales 
being realized in American currency. Were those proceeds kept in 
the united States as a credit against which trade obligations here 
could be paid, the monetary system would prove practical and 
adequate for all needs.. 

That this is true is proven by the experience of the past two years 
during which the parity between local currency and American cur- 
rency remained the same, at the ratio above stated; that is, $0.1928 
to the franc. This was true, because there was no incentive to dis- 
pose of the proceeds of the sale of the island's produce elsewhere by 
deposits in New York banks. The rates of exchange between the 
United States and Europe remained fairly constant, and conditions 
attending the war made it impracticable to dispose of American 
credit, in the comparatively small amounts with which we are con- 
cerned, in Europe at what from time to time may have seemed 
attractive rates. Lately, however, due to a return of easy commu- 
nication with Europe, it has been possible to take advantage of these 
attractive rates with the result that sufficient dollar credit to preserve 
the old parity between American currency and local currency has not 
been maintained for the needs of the islands, but has been disposed of 
in Europe. The result is that these islands have now to contend with 
a situation whereby the local currency has depreciated to a point 
where its present exchange value is approximately only 75 per cent 
of its former value. This condition is real because nearly all then- 
trade relations are with the United States and all trade obligations 
must be canceled by dollar transfers, and the burden falls alike on all 
classes, with two exceptions, the Danish West Indian National Bank 
and the large sugar centrals which are operated for the benefit of 
Danish stock companies. The former is protected because it sells 
dollar transfers at 1 per cent above cost, and the latter can suffer no 
real loss but are in a fair way to profit still more should the present 
rate of exchange between the United States and Denmark prevail or 
increase. 

The slight check on such practices which the war imposed is now 
removed, and it is most likely, unless a new system is inaugurated, 
that they will be governed in the future by rates of exchange which 
exist between the United States and Europe generally, but Denmark 
particularly. It is possible, and some effort has been expended in 
that direction, to establish an artificial rate which will stabilize their 



CONDITIONS IN THE VIRGIN ISLANDS. 35 

local currency, but this possibility is dependent upon the honest 
cooperation and good will of certain interests. At best, the creation 
of such an artificial stabilization is not dependable, as it would be a 
matter of whether or not the interested parties deemed it expedient 
to continue it. 

That the people of the islands are alive to the situation is evidenced 
by the fact that the Colonial Council of the municipality of St. Thomas 
has submitted a formal resolution praying the governor of the Virgin 
1 -lands to exercise his good offices in endeavoring to supplant the 
present currency by American currency. At an informal meeting of 
the St. Croix Council, at which representatives of the public generally 
were present, similar action was taken. 

In its report covering the year 1918 the bank gives as its profits for 
t he year 1917 an amount nearly 200 per cent greater than that earned 
in previous years — profits so large, in fact, that it was possible to pay 
to the stockholders a dividend of 20 per cent, aniounting to 250,000 
francs, and we understand an additional bonus of about 100,500 
francs. The profits for that year exceed the profits of the preceding 
year by ..over 500,000 francs. The profits during the years of its 
existence prior to 1917 seem the normal gains attendant upon the 
transaction of normal business, but the extraordinarily large profit of 
1917 causes some speculation as to the reason therefor, and is trace- 
able primarily through the purchase and sale of foreign coin (assuredly 
American dollars). In 1917 and 1918 this bears the same relation to 
such purchases and sales in preceding years as its 1917 and 1918 
profit bears to the profits of preceding years. It must be assumed 
thai the 1 purchase and sale of foreign coin in the years prior to 1917 
were the amounts required to carry on the normal trade of the 
islands, but when suddenly the purchase and sale of those coins is 
increased from about 300,000 francs in 1916 to nearly 1,000,000 francs 
in 1017 and 1 ,750,000 francs in 1918, without a corresponding increase 
in the trade of the islands, one can not help being impressed that the 
bank has. by its large trade in the purchase and sale of American 
dollars, contributed largely to present conditions. 

From information at hand and actual testimony adduced the sugar 
centrals have likewise been active in disposing of their dollars in 
Denmark at a profit. In a strict business sense both interests can 
justify their actions, and it can not be denied that they have a legal, 
if not a moral, right to leave the placid current of their normal busi- 
ness to catch the added profits to be found in the turbulent stream of 
foreign exchange. So long as these interests can purchase local 
credit in terms of francs with kroner bought at an advantageous rate 
with American dollars earned here, just so long will the inhabitants 
have to contend with present conditions of depreciated currency. 

Impetus to the demand for dollars is given to the islands by their 
transfer to the Tinted States to develop the resources of the islands 
under American rule, hut it is not exactly right that Denmark should 
-upplv the needed dollars under these circumstances, and advance 
dollars at a time when dollars are at a premium the world over and 
are Deeded by Denmark herself, while the return from the improve- 
ments in the future will be of no benefit to Denmark. (As instances: 
Importation of agricultural machinery, of better breeding stock from 
United State-, etc.) 



36 CONDITIONS IN THE VIBGIN ISLANDS. 

The appeals, however, of the mass of the people for the substitu- 
tion of American currency for a currency which no longer serves their 
needs can be understood, and the change desired is certainly justified. 

Whether or not such a change can be effected depends upon a 
number of considerations. The first is: To what extent are we 
obligated to continue to make use of the present system? The 
treaty of cession is the only guide we have in formulating an opinion 
on that question, and on the interpretation of article 4, paragraph 
(A), depends the answer. This has been referred to the Department 
of State together with the Department of the Treasury. 

The next consideration is: How can such a change be effected? 
Three methods suggest themselves. First, by the establishment of 
local capital of a bank which would transact all its business in terms 
of United States dollars. 

The second method contemplates the assistance of the Federal 
Government in the loan of a sum sufficiently large to buy out the 
Danish bank. As the loan would be made to the government of the 
Virgin Islands, the adoption of this method would involve the 
establishment of a government bank. This plan would require a 
large loan from the Federal Government. It would form a departure 
to which consideration must be given. 

The third method contemplates the establishment by a strong 
American bank of branches in St. Thomas and St. Croix, and requires 
as one incentive the legal establishment of the American system. 

An analysis of the report of the Danish West Indian National Bank 
for 1918 indicates that to effect the change of monetary systems under 
any of the phases mentioned herein would require about $1,500,000, 
about half of which would go toward the acquisition of the bank's 
local investments and would remain invested here at a rate averaging 
5J per cent. The remainder would probably be sufficient to buy 
up outstanding notes and provide for a circulation sufficient for the 
needs of the islands. 

It has also been suggested that the Federal Government, out of 
Federal funds, place the necessary dollars amounts at the disposal 
of the islands, at 5.20, to be sold by the bank (or by some commission 
named), at 5.25 (normal rates), against an express declaration by the 
merchants that such funds are intended exclusively for the payment 
of importations of foodstuffs and necessaries of life from the United 
States to the Virgin Islands, for use there, and not for reexportation 
except under special licenses, the francs amounts for such Federal 
funds to be credited to the Government on a francs account on the 
books of the bank, to carry interest at 2\ per cent per annum, and to 
remain there until normal times arrive, or for a period of three or 
five years, for instance, and thereafter subject to six months notice, 
the bank to reserve the right to at any time repay the amount, or 
any part of the same, in United States currency, at 5.25 (normal 
selling rate). 

The total requirements of the islands are at present estimated at 
$150,000 a month, but such amounts would hardly be necessary, as 
the sugar factories could perhaps be induced to place their monthly 
requirements at the disposal of the bank in dollars, reducing the 
Federal amount accordingly. The requirements of the largest sugar 
factory (Bethelem) are estimated at $600,000 a year, the other two 
factories together at $300,000. 



CONDITIONS IN THE VIRGIN ISLANDS. 37 

The bank, at the same time, to prevent influx of European money 
by regulating its buying rates for such moneys, or, preferably, by sell- 
ing eventually offered amounts in New York, and thereafter buying 
the dollar proceeds obtained in New York. 

This arrangement would, through the advance from the Federal 
Government, secure time for negotiations without undue suffering 
to the population here and without bringing either any loss to the 
Government or any profit to anyone else. During a whole year, if 
such a time was required, and even if no other amounts were forth- 
coming, the total amount would be about $1,800,000, i. e., $150,000 
per month, and which amount must not be considered as an expense 
or loss to the United States Government, but as a trust-fund deposit 
(the Government having deposited funds with the bank at St. Thomas 
instead of having them deposited elsewhere). Also, the amount 
could not be as much as $1,800,000 for the reason that the sugar 
factories give the bank about $1,000,000. It should be stated here 
that when things had thus been normalized for some few months 
matters would revolve naturally without advances or deposits from 
the Federal Government, because European moneys could not get 
into the monetary system. 

Luxury rate : Only foodstuffs and necessities of life to be imported 
against the said funds; if anything else should be desired, then krone 
drafts could be issued and sent by the purchaser to New York, to be 
disposed of there in payment of such articles. The declarations to 
be sent daily to the Government as vouchers. 

In any event, it seems to be well established that a change to 
United States currency is necessary for the real economic develop- 
ment of the islands, and, in justice to the mass of the people, the change 
should be effected at the earliest possible date. Their acquaintance 
with our system would make the change easy of accomplishment; 
and during the sale negotiations we, in effect, promised to interest 
American capital to take over the monetary interests in the islands, 
as evidenced on page 57 in the deliberations of the Danish Diet. 

RECOMMENDATIONS. 

The commission in presenting this report submits the following 
recommendations : 

1. Om' Government to assist in cooperation with the people of the 
islands in establishing an adequate water system in St. Thomas and 
in St. Croix. 

2. A better system of transportation should be provided between 
the various islands and between Porto Rico and the islands. And it 
is recommended that the Shipping Board give immediate attention 
to tli is question. 

3. Steps should be taken to provide an American system of cur- 
rency in place of the present Danish system which now burdens the 
people by virtue of exchange rates resulting in decreased purchasing 
value of the Danish monev. 

4. The existing code of Danish laws should be superseded by a 
code of laws based upon American principles and ideals. 

5. Educational work in the islands should be greatly extended and 
intensified. 



38 CONDITIONS IN THE VIRGIN ISLANDS. 

6. As far as practicable American boats should be bunkered and 
fueled at St. Thomas. This question has already been taken up 
with the Shipping Board. 

7. There should be some method adopted by which the people of 
St. John will have mail delivery if it can be accomplished at a reason- 
able expense. This is a question for the Post Office Department, 
and we earnestly recommend to that department that mail facilities 
be restored to the people of St. John. 

8. The agriculture experimental station should be enlarged and 
its work extended over the islands of St. Thomas and St. John. We 
particularly call the attention of the Department of Agriculture to 
this question. 

9. The bar in the harbor of Christiansted should be removed. 
This would open the harbor for boats of medium and light drafts. 
A provision for a survey of this matter will probably be adopted in 
the pending river and harbor bill. 

10. The establishment of libraries with good buildings at St. 
Thomas and in St. Croix would be of great advantage in the develop- 
ment of these islands. We realize this is a work that the Government 
would not undertake. We offer this suggestion in the hope that 
those interested in library work may take up the question and possibly 
work out by private enterprise a plan to establish libraries in these 
two islands. 

11. The commission found the system of taxation in the islands 
unjust, inefficient, and archaic. We recommend that the entire 
system be reformed with a view of securing a greater income, which 
we believe possible, and in order also to more fairly equalize the 
burdens of taxation. 

12. It is the judgment of the commission that the present local 
legislative system of one council for St. Thomas and St. John and 
one for St. Croix be retained, and that the said councils sitting 
together should constitute a grand council for the whole group of 
islands acquired by the United States from Denmark in all matters 
affecting the interests of the islands common to all. 

13. It is the judgment of the commission that in the revision of the 
judicial system, one court and judge having general jurisdiction 
should be provided for the islands of St. Thomas and St. John and 
one for the island of St. Croix; and that writs of error and appeals 
should be to an appellate court consisting of the two judges from 
said islands and the judge of the district court of the United States 
for Porto Ptico, sitting in Cane. 

14. After careful consideration it is the judgment of the commission 
that it is inexpedient to change the existing system of government at 
present. The contemplated revision of local laws should be enacted 
and put in operation before further changes in the supervisory 
government should be undertaken. 

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